Litigation and Legal Issues at Phillips 66

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Conoco and Phillips 66 announced on November 18, 2001 that their boards of directors had unanimously approved a definitive agreement for a "merger of equals". The merged company, ConocoPhillips, became the third-largest integrated U.S. energy company based on market capitalization and oil and gas reserves and production. On November 11, 2011 ConocoPhillips announced that Phillips 66 would be the name of a new independent oil and gasoline refining and marketing firm, created as ConocoPhillips split into two companies. ConocoPhillips kept the current name of the company and concentrated on oil exploration and production side while Phillips 66 included refining, marketing, midstream, and chemical portions of the company. Photo: Hugh Pickens all rights reserved.

by Hugh Pickens, Ponca City Oklahoma


The purpose of this report is to provide a comprehensive overview of Phillips 66 that documents and explains the company's business strategy and execution of that strategy.

Major Sections of this report on Phillips 66 include:

Safety, Environment, Legal


Corporate


Strategic and Financial


Business Segments


Stock Market


Reference

Refining Business Segment


Increasing Profitability in Refining Business Segment


Detailed Look at Ponca City Refinery


Other Phillips Refineries


Other Locations


Contents

Master Index of Articles about Phillips 66

The 587 foot tall Mammoet PTC 140 crane, seen here from North First Street, towers over the Refinery Complex in Ponca City. The supercrane was used to move two new 232 ton coker reactor units within the refinery on September 29, 2013. Phillips was willing to invest $70 million in the two new coker reactor units because the Ponca City Refinery is one of the best run, safest, and most profitable of Phillips' fifteen worldwide refineries and Garland wants the refinery in Ponca City to continue to run smoothly and profitably. This photograph of the supercrane in Ponca City was taken from almost two miles away from the crane. Photo: Hugh Pickens All Rights Reserved.
Hugh Pickens, an analyst who closely follows Phillips 66, speaks with Phillips CEO Greg Garland (right) about the disposition of the North Tower, South Tower, and Research West at Phillips' Ponca City Refinery after Garland's speech to the Bartlesville Chamber of Commerce on August 13, 2014.

by Hugh Pickens, Ponca City Oklahoma


The purpose of this report is to provide a comprehensive overview of Phillips 66 that documents and explains the company's business strategy and execution of that strategy.

Major Sections of this report on Phillips 66 include:

Safety, Environment, Legal


Corporate


Strategic and Financial


Business Segments


Stock Market


Reference

Refining Business Segment


Increasing Profitability in Refining Business Segment


Detailed Look at Ponca City Refinery


Other Phillips Refineries


Other Locations


Litigation and Legal Issues with Phillips

December 10, 2017: 472 Plaintiffs Join Lawsuit Against Phillips 66 over Sweeny Flooding

The Brazapot Facts reported on December 10, 2017 that 472 plaintiffs have filed a new petition against Phillips 66 and Chevron Phillips Chemical claiming that the companies caused damage to persons and property in the Sweeny area when they blocked a bayou system, causing Hurricane Harvey’s floodwaters to rise rather than drain, up from 324 in the lawsuit in September. Josh Bowlin of the Houston firm Walston Bowlin said he is in contact with dozens more residents and business owners who may join the lawsuit at a later time. Because the litigation is a mass-action lawsuit, each of the plaintiff’s claims have to be assessed individually, and only people who have joined the suit will be eligible to receive compensation through a settlement or a court action, Bowlin said. “There are 500 plaintiffs with different damages, from pecan orchards to personal effects,” Bowlin said. Bowlin said he has hired hydrologists to assess whether the bayou blockages alleged in the petition could have caused the flooding that area residents experienced. “There is a huge watershed area in that area, and remarkably the Linville Bayou acts as a drainage source for that entire area,” he said. “We are looking into mapping the entire impact of what would happen in a rainfall event such as this and how the water would be dispersed.”

Plaintiffs’ stories about the flooding have been “remarkably consistent,” Bowlin said. “I have three teams of people down there and appraising homes, and they have probably been to 125 homes,” he said. “Everyone got a little water on their property, then everything started to recede, and then overnight everyone experienced a flash flood incident.” That flooding, Bowlin said, is “consistent with damming the Linville Bayou and its tributaries around there.”

Phillips 66 did not respond to requests for comment for this story, and Chevron Phillips Chemical declined to comment because the matter is still under litigation.[1]

November 6, 2017: Approval of Phillips 66 Pipeline's 60,000-gallon Butane Tank has Jenks City Councilor Concerned

The Tulsa World reported on November 6, 2017 that Jenks City Councilor Robert Lee can’t figure out how Phillips 66 Pipline Co putting a 60,000-gallon butane tank so close to soccer fields, an education facility and a major roadway makes sense but Jenk's City Council's 4-3 vote gave Phillips the permit it needed to add a butane-blending operation to its distribution terminal at 10600 S. Elwood Ave. “This decision truly does not benefit any one individual in the city of Jenks or the city of Jenks,” said Lee. “It just benefits (Phillips), and that is why I am so disappointed in their decision.” In a worst-case scenario, Lee said, the tank could blow up, creating a mile-wide “blast zone” that would engulf residential neighborhoods, the Titan Sports and Performance Center and Jenks Public Schools’ Agricultural Science Center.

Dennis Nuss, director of media and external relations for Phillips 66, said the company is upgrading several facilities around the country with butane-blending operations. “Adding butane to gasoline brings the mixture up to state and federal motor fuel volatility limits, which vary seasonally,” Nuss said. “Similar facilities have existed in the Tulsa area for years.” Jenks Assistant Fire Chief Greg Ostrum said Phillips 66’s new facility will be required to meet eight or nine national fire codes in addition to Jenks’ code. “We are not breaking ground here,” he said. “There are safety standards that have been established for this kind of project.”[2]

October 12, 2017: Phillips 66 Retirees Sue Phillips 66 Retirement Plan Investment Committee For Failing To Provide Them A Wider Array Of Investment Offerings In The Company's 401(K) Retirement Plan

Phillips 66 Retirees Sue Phillips 66 Retirement Plan Investment Committee For Failing To Provide Them A Wider Array Of Investment Offerings In The Company's 401(K) Retirement Plan. The retirees say the Phillips 66 investment committee should have but did not launch an independent review after ConocoPhillips spun off Phillips 66, a failure that cost the plan participants millions of dollars during the times when the price of ConocoPhillips' stock fell, according to the lawsuit. The retirees are seeking unspecified lost profits.

The Houston Chronicle reported on October 12, 2017 that three retirees who are seeking to represent about 12,000 other plan participants sued the retirement plan investment committee of Phillips 66 for failing to provide them a wider array of investment offerings in the company's 401(k) retirement plan. Plan sponsors have a fiduciary responsibility to provide a diversified mix of investment options. Plan participants have funneled more than $1 billion into ConocoPhillips stock, representing about 25 percent of the plan's total assets. Many more have invested their retirement savings in Phillips 66 stock. Taken together, plan participants have put more than half their retirement assets into the stock funds of the two energy companies. It's too risky to put so many assets into one industry, especially one as volatile as energy, said Connecticut commercial litigator Robert Izard whose three clients allege the Phillips 66 retirement plan breached its fiduciary duty by allowing the plan to hold massive amounts of ConocoPhillips stock. The Phillips 66 investment committee should have but did not launch an independent review after ConocoPhillips spun off Phillips 66, a failure that cost the plan participants millions of dollars during the times when the price of ConocoPhillips' stock fell, according to the lawsuit. The retirees are seeking unspecified lost profits.

Phillips 66 said it would not comment on the lawsuit.[3]

October 2, 2017: Phillips 66 Oil-by-Train Plan to Santa Maria Refinery is Dead Say Environmental Groups

The San Luis Obispo Tribune reported on October 2, 2017 that Phillips 66's plan to transport crude oil by rail to its Santa Maria Refinery is dead, environmental groups say, after the company agreed to drop its lawsuit against San Luis Obispo County. If the settlement is approved by the court, the county’s denial of the project will stand, said county attorney Tim McNulty. “I can say with 99.9 percent certainty this is the end of the track for more oil trains in San Luis Obispo County,” said Andrew Christie with the Santa Lucia Chapter of the Sierra Club. “Projects never fail just because they’re ill-conceived, especially when they’re proposed by large, well-funded entities,” Christie said. “The only way those projects fail is thanks to grassroots organizing and local people saying loud and clear, ‘We don’t want this project.’ And that happened on a scale I’ve never seen before.” Phillips 66 officials declined to comment Monday on what McNulty called a settlement.[4]

September 29, 2017: Sweeny Homeowner's Lawsuit Says Phillips 66 and Chevron Phillips Knowingly Forced Floodwaters into their Neighborhood

Phillips 66 Built Dams "in the dark of night" Causing Homes to Flood Says Lawsuit by 350 Sweeny Residents. The Army Corps of Engineers is investigating claims by residents of Sweeny, Texas, that floodwaters were knowingly forced into their neighborhoods when Phillips 66 and Chevron Phillips dammed up two bayous. A lawsuit filed by about 150 families claims that by damming two nearby bayous without warning, the companies knowingly pushed floodwater away from the plant and into neighborhoods.

CBS News reported on September 29, 2017 that the Army Corps of Engineers is investigating claims by residents of Sweeny, Texas, that floodwaters were knowingly forced into their neighborhoods when Phillips 66 and Chevron Phillips dammed up two bayous. A lawsuit filed by about 324 families claims that by damming two nearby bayous without warning, the companies knowingly pushed floodwater away from the plant and into neighborhoods. Video shows how the plant stayed dry – and left homes under water. "It was full. I mean, it was almost to the top of where we're standing right now," said lawyer Josh Bowlin. Bowlin represents the families now suing the Phillips 66 and Chevron Phillips. He showed one spot that was dammed and a video of the backhoe that was used to remove the blockage. "I've talked to so many people that if they just had a little bit of notice they could have saved so much," Bowlin said.

Chevron Phillips did not respond to repeated requests for comment. But in a statement, Phillips 66 said, "Our priorities during the flood were to protect people and the environment...we do not believe these actions on one side of our property impacted the ongoing flooding event adjacent to the refinery or in the community." "I apologize for the profanity but that's a bunch of bull**** straight up. They made a conscious decision to save their plant but those actions have consequences and they need to be held responsible for those actions," said David Harquist. Residents say disaster struck after the storm had moved on. Floodwaters stopped receding and began rising again -- this time, into the house. "I was shocked. I was like what in the world is going on and then all of the sudden the water came up and it started coming up quickly," Harquist said.[5]

According to the Brazaport Facts, the petition alleges Phillips 66, Chevron Phillips and Chevron Phillips Chemical Co. caused flooding in areas near Phillips 66’s Old Ocean refinery by erecting dams on the Linville Bayou and Little Linville Bayou “in the dark of night,” starting August 30, 2017. “These dams gave the water flowing downstream nowhere to flow, except to flood the land and its people surrounding the Sweeny Refinery,” the petition states. Refinery employees “never warned a single Sweeny resident of the imminent danger upon them,” the petition states. The petition also claims “multiple chemical and petroleum spills occurred in Sweeny Refinery and were threatening contamination in the flowing waters.” Bowlin said the contaminants included the carcinogen benzene and wastewater, though analyses of the contaminants still are ongoing. Bowlin said he witnessed the blocked bayous first-hand and is confident evidence will show the refinery’s managers to have been at fault. The dams constructed by refinery workers contributed to flooding in an area that stretched as far north as FM 1301 and as far south as FM 521, Bowlin said. More than 350 residents and businesses have joined in a lawsuit claiming the actions at a Sweeny-area industrial site caused their properties to flood, and that number likely will grow, said Bowlin .[6]

The plaintiffs claim Phillips 66 employees erected temporary dams at the Linnville and Little Linnville bayous to prevent petroleum and chemical leaks at its Sweeny refining and petrochemical complex. The lawsuit alleges the Houston-based energy giant knew the efforts would cause nearby homes to flood, but that they did so anyway without notifying local communities. The lawsuit alleges that Harvey passed through the Sweeny area without causing any significant flooding, leaving residents to believe their properties survived intact. "They were wrong," the suit asserts. Phillips 66 built dams "in the dark of night" on August 30 to protect its massive refining complex. The suit contends that, because of the dams, the water level in Sweeny kept rising and flooded many homes, trapping people inside of their houses. "Unforgivably, defendants never warned a single Sweeny resident of the imminent danger upon them," the lawsuit claims. "Instead, defendants sat quietly even though their hydrologists had told them the town was going to flood because of the dams."[7]

September 14, 2017: Texas Homeowners Sue Phillips 66 over Flooded Homes near Sweeny Refinery

ABC Channel 13 reported on September 14, 2017 that homeowners in Brazoria County have filed a lawsuit against Phillips 66 alleging that Phillips intentionally dammed the area around Sweeny Refinery with concrete and boxcars, directing the flow of water into residential areas in Sweeny and nearby Magnolia during Harvey. Plaintiffs also claim the water was contaminated with chemicals from the refinery and are asking for cash damages.

Phillips 66 released the following statement to ABC13 regarding the lawsuit: "Phillips 66 is committed to protecting the health and safety of the people involved in our operations and in the communities where we operate. During severe weather events like Hurricane Harvey, we have plans in place to protect our employees, our facilities and our communities. We are aware of concerns from the community suggesting that our actions to protect the refinery contributed to additional flooding in the area. We do not believe that to be the case, however, we are investigating the issue and have been working with local authorities. Although we experienced significant flooding in the refinery, our actions minimized the potential for release of feedstocks and products that could have negatively impacted the community and the environment."[8]

July 7, 2017: Phillips 66 Blames Contractor for Hydrofluoric Acid Leak at Ferndale Refinery That Sent 7 Workers to the Hospital

The Bellingham Herald reported on July 7, 2017 that Phillips 66 is appealing its $37,800 fine for a February hydrofluoric acid leak at its Ferndale Refinery that sent seven workers to the hospital. The Washington State Department of Labor & Industries deemed the incident as “serious" and found that Phillips “did not implement safe work practices for the control of hazards for the employees” and the company “did not inform the contract employer of the known potential fire, explosion or toxic release hazards related to the contractor’s work and the process.”

Phillips disagrees with the assessment of the fine, saying a contractor was at fault. “The incident in question occurred when a trained contractor improperly disconnected an enclosed rod out tool from an open drain valve in the alkylation unit,” Phillips stated in its appeal. “The incident was not caused by the failure to develop or implement safe work practices, but by a contractor’s failure to follow them." A hearings officer will decide the matter by Aug. 28, according to L&I spokeswoman Elaine Fischer.[9]

June 23, 2017: Opponents of Phillips 66 Funded Bayou Bridge Pipeline File Lawsuit in Louisiana

The New Orleans Advocate reported on June 23, 2017 that opponents of the Bayou Bridge Pipeline, funded in part by Phillips 66, have sued the state of Louisiana for granting a permit needed to allow construction claiming the Louisiana Department of Natural Resources violated the state constitution when it issued a Coastal use permit because officials neglected the negative impact of the pipeline. "The most urgent problem is how the pipeline will block evacuation from the Burton Lane Community in St. James. Residents complain that they are trapped without an escape route in the event of an emergency, spill or release," a coalition of environmental groups wrote in a news release. The plaintiffs, who will be represented by the Tulane Environmental Law Clinic, have pressured the state to produce a more thorough environmental impact statement.[10]

June 16, 2017: Phillips 66 Slapped With Two "Public Nuisance" Violations for Oil Sheen Incident at Rodeo Refinery that Resulted in 1,500 Odor Complaints and 120 Hospital Visits

Phillips 66 Slapped With Two "Public Nuisance" Violations for for Oil Sheen Incident at Rodeo Refinery that Resulted in 1,500 Odor Complaints and 120 Hospital Visits. The Bay Area Air Quality Management District issued two “public nuisance” violations to Phillips 66 stemming from a September 20, 2016, oil sheen incident on the San Pablo Bay that resulted in nearly 1,500 odor complaints and an estimated 120 visits to Solano County hospitals. “The air district thoroughly investigated this incident and determined the Phillips 66 Refinery and the Yamuna Spirit oil tanker operator played a role in this event and both parties will be held accountable,” said Jack Broadbent in a statement, executive officer at the district. Photo: Michael Macor, The Chronicle

The Times Herald reported on June 16, 2017 that the Bay Area Air Quality Management District issued two “public nuisance” violations to Phillips 66 stemming from a September 20, 2016, oil sheen incident on the San Pablo Bay that resulted in nearly 1,500 odor complaints and an estimated 120 visits to Solano County hospitals. “The air district thoroughly investigated this incident and determined the Phillips 66 Refinery and the Yamuna Spirit oil tanker operator played a role in this event and both parties will be held accountable,” said Jack Broadbent in a statement, executive officer at the district. On the day of the event, a noxious smell blanketed the city of Vallejo. The fire department reported that over 800 residents called complaining of the strong smell of natural gas, gasoline, and “rotten eggs.” The odor was so strong that it could be detected as far away as Redwood and Broadway. A shelter-in-place order was given around 8 p.m. for south Vallejo and it was lifted the following morning. Vallejo Mayor Bob Sampayan applauded the air district’s decision. “I hope we can find these people accountable,” Sampayan said by phone on Friday afternoon. “There was no reason to have this happen.” Fines for these violations have yet to be assessed by the air district.[11]

May 26, 2017: Phillips 66 Get Go-Ahead to Sue San Luis Obispo County Supervisors Over Santa Maria Refinery Oil Train Terminal

The San Luis Obispo Tribune reported on May 26, 2017 that San Luis Obispo Superior Court Judge Barry T. LaBarbera said he will allow Phillips 66 to sue the San Luis Obispo County Board of Supervisors in a lawsuit that includes new allegations based on what happened at hearings on the project March 13 and 14 when speakers from across California urged the board to reject the so-called bomb trains. Supervisors voted 3-1 to deny the company’s plan to extend railroad at its Santa Maria Refinery on the Nipomo Mesa to allow deliveries of crude by rail from across North America.

The judge has now ruled against the county and environmental groups with a decision to allow Phillips 66 to file a new civil complaint. Environmental groups had argued that the company’s litigation was an attempt “to undermine and circumvent local agency jurisdiction.” LaBarbera said he would not address that issue and cited case law that said, generally, a judge will not consider the validity of the proposed complaint when deciding whether it can be filed. In its lawsuit, the company will ask the court to direct the board to set aside its findings about environmentally sensitive habitat at the location of the proposed project. The case will return to court in August.[12]

May 25, 2017: Phillips Pays New Jersey $39 million Settlement Over Ground Water Contamination

KRGV reported on May 25, 2017 that New Jersey officials say they reached a $39 million settlement with Phillips 66 over ground water contamination. Attorney General Christopher Porrino says Phillips 66 (then ConocoPhillips) was one of 50 oil and chemical firms sued in 2007 by the state over ground water contamination. The state argued that the defendants were responsible for contamination from a gasoline additive called MTBE. In 2012 ConocoPhillips transferred some assets and liabilities, including MTBE cases, to Phillips 66. Phillips 66 Spokesman Dennis Nuss says the case was settled on "mutually acceptable" terms.[13]

April 17, 2017: Phillips 66 Won't Appeal Decision to Stop Oil Trains Coming to Santa Maria Refinery But the Fight is Not Over

The San Luis Obispo Tribune reported on April 17, 2017 that Phillips 66 won’t appeal San Luis Obispo County’s decision rejecting its oil-by-rail plan to the California Coastal Commission, but it will continue the fight in court. “The window is closed, and they did not file an appeal. The Board of Supervisors’ decision stands,” said Cassidy Teufel, a senior energy scientist with the Coastal Commission.

However in an amended petition filed against the county on March 22 in San Luis Obispo Superior Court, Phillips 66 contends the county missed a filing deadline over the issue of environmentally sensitive habitat and also that the zoning law is unconstitutional because it doesn’t allow Phillips an opportunity to be heard. If Judge Barry LaBarbera agrees with the company, the county Planning Department would have to revisit its findings, triggering a new land-use decision. His decision could be challenged to an appellate court. “They knew they were going into strong headwinds (if Phillips filed an appeal with the Coastal Commission). Now they’re going to try to make an end run around on a technicality,” said Laurance Shinderman, a volunteer with the rail spur-opposition group, Mesa Refinery Watch Group. “A good neighbor wouldn’t do that."[14]

April 5, 2017: Small California Towns Are Facing Off Against Oil Companies Like Phillips 66 and Winning

Small California Towns Are Facing Off Against Oil Companies Like Phillips 66 and Winning. “[This] is a pretty new effort to work with leaders and community organizations to engage in local elections that are critical for climate and environmental justice issues,” said Whit Jones, the East Coast–based campaign director for Lead Locally. “We partnered with community organizations in California last year to make sure that voters’ demands to stop oil train terminals, or to stop fracking, were heard at the ballot box.” Photo: Phillips 66 Santa Maria Refiney project protest, July 11, 2015 by Stand.Earth Flickr Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

Grist reported on April 5, 2017 that on March 14, 2017 the San Luis Obispo County Board of Supervisors shut down a Phillips 66 crude-by-rail plan to bring oil into its Nipomo Mesa refinery. The 3-to-1 vote (with one recusal) against the proposal represented a huge change in a county that for years had supported refinery projects. “[This] is a pretty new effort to work with leaders and community organizations to engage in local elections that are critical for climate and environmental justice issues,” said Whit Jones, the East Coast–based campaign director for Lead Locally, a new project of the Advocacy Fund and which provided electoral support in Benicia, Oxnard, and Arvin. “We partnered with community organizations in California last year to make sure that voters’ demands to stop oil train terminals, or to stop fracking, were heard at the ballot box.” Another new group, Leadership for a Clean Economy, also worked in these communities, in partnership with many local environmental justice organizations.

With the U.S. Environmental Protection Administration now headed by Scott Pruitt, a climate change denier, environmentalists may attempt more victories at the local level. “They’re simpler, in a way,” Jones said of local policy campaigns. “The people in the community understand the issues because these things are proposed in their backyards. This isn’t some obscure, abstract conversation about the nation’s energy policy or climate change; this is about whether or not a polluting facility will be sited in their town.”

Other California towns have also successfully fought large oil companies. In the Kern County town of Arvin, which 10 years ago won the dubious distinction of having the smoggiest air of any U.S. city, a 23-year-old city councilman was elected mayor on a promise to regulate the oil industry and protect the city’s water and air — a huge task in California’s biggest oil-producing county. Benecia, a small refinery town in Northern California stood up against its biggest employer and taxpayer. Valero, the Texas-based petroleum giant, had sought routine approval for a huge crude-by-rail project. The city council of Benicia, however, decisively rejected Valero’s proposal. “We had a small, but extremely well-informed group of people who have been working on these issues for a long time,” said Benicia Mayor Elizabeth Patterson, “and I give all the credit to that group.” Patterson is a longtime environmentalist who has been mayor since 2007 and was reelected in November.[15]

April 3, 2017: Deadline Looms for Phillips 66 to Appeal Rejection of Santa Maria Refinery Rail Project

The San Luis Obispo Tribune reported on April 3, 2017 that Phillips 66 only has until April 14 to appeal San Luis Obispo County’s rejection of its proposed Santa Maria Refinery oil-by-rail project to the California Coastal Commission. The county issued a notice of final county action last week, announcing that Phillips 66 had exhausted its appeals at the county level and can now appeal the matter to the Coastal Commission, triggering a 10-business-day countdown to the filing deadline. The company has not announced whether it will appeal to the commission.[16]

March 31, 2017: Proposal to Limit Greenhouse Gases Could Affect Phillips 66's Rodeo Refinery

The Mercury News reported on March 31, 2017 that 120 people attended the workshop that the Bay Area Air Quality Management District held about its two proposed rules aimed at limiting air pollution from five Bay Area oil refineries near San Francisco including Phillips 66's Rodeo Refinery. Environmentalists and some plant neighbors said a proposed numeral cap on greenhouse and other emissions is needed to prevent increased pollution if plants switch to dirtier crude oil sources such as from Canadian tar sands areas. “We think this cap is needed to prevent serious and irreversible effects,” said Greg Karras, a senior scientist with Communities for a Better Environment, a statewide environmental group with offices in Oakland. “The rule is designed to allow other measures to reduce emissions, but we have to stop increasing them first.”

Some oil industry workers attacked the cap. They said refineries have reduced their air emissions dramatically over the past four decades and yet the proposed cap could lead to production cuts and losses of high-paying jobs. “I am very concerned the cap would cost jobs,” said Mike Miller, president of the United Steelworkers Local 326 unit chair representing workers at the Phillips 66 refinery in Rodeo. While the push to reduce fossil fuel use will produce more solar industry jobs, Miller said, it would be difficult for refinery workers with homes and families to survive on $13-an-hour jobs as solar installers. Air pollution district managers do not support the cap. They said they fear the cap would be vulnerable to a legal challenge as unfairly singling out the oil industry. The cap also could interfere with the state’s cap-and-trade system in which industries can buy pollution credits to offset their greenhouse gas emissions.[17]

March 26, 2017: How Local Citizens Built a Successful Movement to Keep Phillips 66's Oil Trains Out of their Backyard Near the Santa Maria Refinery

How Local Citizens Built a Successful Movement to Keep Phillips 66's Oil Trains Out of their Backyard Near the Santa Maria Refinery. Bakken crude killed 47 people in Lac-Mégantic [Quebec].” “Obliterated a whole town,” said Shinderman. When Phillips said it would transport crude oil in “the absolute safest tankers that exist,” said Akel, the group did its homework. There are no fail-safe tankers. “Guess what? When they fall over, they rupture and everything goes boom.” Photo: Police helicopter view of Lac-Mégantic, the day of the derailment Wikipedia

In December 2013, a couple of neighbors from an upscale residential development on California's Central Coast attended a community meeting at a middle school in Arroyo Grande to learn about a new project proposed by oil giant Phillips 66 for its Santa Maria refinery, which sits near the ocean below the Nipomo Mesa, where they live.

Now the LA Times has published a major story on March 26, 2017 about how a group of 12 California citizens stated a movement with one burning mission: to keep Phillips 66's oil trains out of their backyard in Nipomo, California. For more than two years, Martin Akel emailed a professional-caliber, monthly newsletter to about 2,000 supporters, 1,000 government officials and several hundred members of the media. At public hearings, the oil train opponents delivered lots of grim news about the dangers of crude oil trains, which they called “bomb trains,” but overall they were upbeat. Wearing referee shirts, they would set up tables adorned with bowls of candy. “We’d say, ‘Stop by the zebra table and we will orient you,” said Akel. “If they spoke, we would give them candy. I spent a lot of money on candy, and I didn’t put in for reimbursement.”

What the neighbors, mostly retired professionals who had moved here from places such as Irvine and New Jersey, loved most about the area was its bucolic splendor, lower cost of living, and slower pace. Phillips 66 had always shipped oil to and from the Santa Maria refinery by pipeline. Now it was proposing a new way to deliver the crude: by train. And it would have to build a new rail spur at its refinery to accommodate mile-long oil trains, coming in on Union Pacific’s main line, at the rate of three a week, each carrying 2.2 million gallons of crude.

Each time Phillips 66 or its proponents claimed that oil trains were safe, that the kind of oil it wanted to transport was safe, or that Union Pacific tracks are safe, the Mesa Refinery Watch Group was able to point and laugh. They researched every oil train derailment and explosion, the type of oil transported, the type of tankers used, and track conditions. “They said we aren’t going to bring in any oil that’s dangerous,” Akel said, “and we stood up at a meeting and said, ‘Are you bringing in Bakken crude from North Dakota?’ And they said, ‘We may.’ We went crazy on that. Bakken crude killed 47 people in Lac-Mégantic [Quebec].” “Obliterated a whole town,” said Shinderman. When Phillips said it would transport crude oil in “the absolute safest tankers that exist,” said Akel, the group did its homework. There are no fail-safe tankers. “Guess what? When they fall over, they rupture and everything goes boom.”

“Phillips 66 used to come to Trilogy every year and ply residents with shrimp and booze,” said Akel. “Around Christmas,” said Gary McKible. “It was a goodwill thing.” “They haven’t been for two years,” said Akel. “Maybe it was something we said.”[18]

March 10, 2017: Judge Rules Against Phillips 66's Legal Appeal over Planning Commission’s Decision to Reject Santa Maria Refinery Rail Spur Project

Cal Coast News reported on March 10, 2017 that San Luis Obispo Judge Barry LaBarbera ruled against a legal appeal filed by Phillips 66 over the SLO County Planning Commission’s decision to reject the oil company’s Nipomo rail spur project paving the way for board of supervisors hearings on the project to begin next week. Phillips 66 sought to obtain a court order sending the case back to the planning commission on the grounds that the commission misapplied land use rules in designating an area to be an environmentally sensitive habit area (ESHA), and thus rending the location undevelopable. The planning commission made the designation after the rail spur project was already accepted, violating a land use ordinance deadline and wasting the company’s time and money, Phillips 66’s attorneys argued.

The judge sided with Phillips 66 on one point. The oil company had argued that the ordinance the planning commission used to reject the project was unconstitutional because it is vague. The California Constitution bars the county from ruling on that matter, LaBarbera said. According to LaBarbera’s ruling, Phillips 66 can file an amended complaint pertaining to the constitutionality issue alone. Special board of supervisors hearings on the Phillips 66 appeal are set to begin Monday and continue through the week.[19]

February 9, 2017: Construction Resumes on Phillips 66 Funded Dakota Access Pipeline After Government Grants Final Easement

The LA Times reported on February 9, 2017 that despite months of protests led by tribal groups and an expanded environmental review ordered in the final days of the Obama administration, construction on the Dakota Access oil pipeline, funded in part by Phillips 66, resumed less than 24 hours after the government granted a final easement allowing for completion of the disputed project. Energy Transfer Partners said that it had “received all federal authorizations necessary to proceed expeditiously to complete construction of the pipeline.” The company, based in Texas, said it expects to have in hand $2.6 billion in loans for the project “within the next several days” and for the pipeline to be operational no later than June.

The Standing Rock Sioux Tribe, which has led protests against the pipeline, has said it will continue to oppose its completion in court and, if necessary, fight the operation of the pipeline if it is completed. The nearby Cheyenne River Sioux tribe, which has joined the Standing Rock Sioux in legal battles, filed a request in federal court in Washington on Thursday for a restraining order to stop construction. The Standing Rock Sioux have encouraged people who have been protesting the pipeline near its reservation for months to leave and focus instead on political and legal efforts across the country. Those efforts include divestment. On Tuesday, Seattle became the first city in the nation to end its relationship with a bank in protest of the pipeline. The Seattle City Council voted unanimously to sever ties with Wells Fargo, which manages about $3 billion for the city annually.[20]

February 9. 2017: Environmental Lawsuit Against Phillips 66 Borger Refinery Benefits Students

News Channel 10 reported on February 9, 2017 that after Phillips 66 Borger refinery failed to meet environmental requirements, they were fined by the Texas Commission on Environmental Quality (TCEQ) and proceeds from the lawsuit are benefiting students in the Borger School District. Any time environmental lawsuits like this are settled, a portion of the financial penalty is paid to a Supplemental Environmental Project. Phillips 66 was penalized $13,688 for failing to meet environmental air standards. Approximately 40 percent of the penalty was paid to a SEP which, in this case, is Borger Independent School District (ISD). These funds will help pay for new school buses with reduced fuel emissions. "We have an older fleet of buses, so it's nice to add a newer bus to our fleet, especially if it has better emissions," said Rebecca Calder the communication coordinator for Borger ISD.[21]

February 1, 2017: Phillips 66 Loses Court Battle Over Paid Leave

Pension & Benefits Daily reported on February 1, 2017 that the Washington State Court of Appeals has agreed with two Phillips 66 workers that the company’s failure to offer specifically designated sick leave didn’t strip them of protections offered by state law, which forces employers offering paid leave to extend that leave to workers caring for sick family members. The dispute centers on a Washington statute forcing employers that offer paid leave to make that leave available for workers who care for sick family members. Two union-represented Phillips 66 workers filed a lawsuit in 2015 claiming that the company made them choose between using vacation days or taking unpaid leave to care for sick family members. According to the workers, they should have been able to take paid leave through Phillips’ short-term disability insurance policy. Phillips argued that it didn’t have to open up short-term disability benefits for workers’ family care needs, because it allowed workers to take vacation days in the event of their own illness or that of a family member. The court disagreed. In its view, the vacation days offered to Phillips employees didn’t qualify as paid leave “for illness” under the terms of the Washington law. This meant that Phillips’ disability plan—the only clear avenue for employees to take sick leave—could be liable for providing paid family leave, the court said.[22]

January 20, 2017: Employees Allege Phillips 66 Violated California Labor Codes

The Northern California Record reported on January 20, 2017 that three California residents, Kyndl Buzas, Raudel Covarrubias and Daniel Runions, allege that they were required to work 12-hour shifts, were never provided rest breaks and that Phillips failed to provide their employees accurate wage statements. The plaintiffs request a trial by jury and seek all unpaid wages, damages, statutory and civil penalties, restitution, enjoin the defendant, disgorgement, all legal fees plus interest and any other relief as the court deems just.[23]

January 17, 2017: Environmental Groups Gear Up for Second Hearing Against Phillips 66 Funded Bayou Bridge Pipeline

400 Come Out to Protest Phillips 66 Funded Bayou Bridge Pipeline. “This is like 50 times the amount of people we have at most of these meetings,” said Scott Eustis, adding that the proposed pipeline was “the biggest and baddest I’ve seen in my career”. Now Louisiana environmental groups are gearing up for a second hearing on February 8, 2017. "I expect we will have a bigger turnout, because people are fired up," said Anne Rolfes, director of the Louisiana Bucket Brigade environmental group. "... This opposition is really unprecedented." Photo: Desmogblog

The Advocate reported on January 17, 2017 that Louisiana environmental groups are gearing up for round two in a battle against the proposed 163-mile Bayou Bridge Pipeline, funded in part by Phillips 66, that they say they fear will foul the state's wetlands and water. A public hearing last week in Baton Rouge for a required U.S. Army Corps of Engineers permit drew more than 400 people, but activists expect a bigger turnout on February 8, 2017, said Anne Rolfes, "because people are fired up." "... This opposition is really unprecedented."

The subject of next month's hearing is the state Department of Natural Resources permit needed for portions of the pipeline that would pass through state-designated Coastal Zones in St. James and Assumption parishes, said DNR Communications Director Patrick Courreges. DNR began reviewing the permit early last year and initially closed the public comment period in May, but Courreges said the agency decided to hold a public hearing based on the increasing amount of attention the project has received in recent months. "When this project was originally being looked at, there wasn't that much interest," he said. Rolfes said the pipeline company can expect continued protests to block the project, even if it receives the required approvals from regulators who she accused of generally doing "big oil's bidding." "They will not lay this pipeline," she vowed.[24]

January 17, 2017: Builders of Phillips 66 Funded Dakota Access Pipeline File Motion to Bar Environmental Study by US Corps of Engineers

Yahoo News reported on January 17, 2017 that Energy Transfer Partners, builders of the Dakota Access Pipeline funded in part by Phillips 66, has filed a motion to bar the U.S. Army Corps of Engineers from initiating an environmental study for its controversial Dakota Access pipeline crossing at Lake Oahe in North Dakota. ETP has requested that a U.S. District Court judge for the District of Columbia stop the Corps from initiating the environmental impact statement process until a ruling has been made on whether the company already has necessary approvals for the pipeline crossing. The Corps said it would publish a notice in the Federal Register on Wednesday stating its intent to prepare an environmental impact statement for the requested easement at Lake Oahe. The notice will invite interested parties to comment on potential issues and concerns, as well as alternatives to the proposed route, which should be considered in the study.[25]

January 15, 2017: 400 Come Out to Protest Phillips 66 Funded Bayou Bridge Pipeline

400 Come Out to Protest Phillips 66 Funded Bayou Bridge Pipeline. “This is like 50 times the amount of people we have at most of these meetings,” said Scott Eustis, adding that the proposed pipeline was “the biggest and baddest I’ve seen in my career”. The project, if approved, will run though 11 parishes and cross around 600 acres of wetlands and 700 bodies of water, including wells that reportedly provide drinking water for some 300,000 families. Graphic: Phillips 66 Investor Presentation, September 2015

The Guardian reported on January 15, 2017 that Scott Eustis, a coastal wetland specialist with the Gulf Restoration Network, was surprised to be joined by more than 400 others when he attended a public hearing in Baton Rouge about the Bayou Bridge Pipeline, a pipeline extension partially funded by Phillips 66 that would run directly through the Atchafalaya Basin, the world’s largest natural swamp. “This is like 50 times the amount of people we have at most of these meetings,” said Eustis, adding that the proposed pipeline was “the biggest and baddest I’ve seen in my career”. The Bayou Bridge Pipeline, if approved, would carry 480,000 barrels of oil per day a final 162 miles across the state to refineries and ports, through eight watersheds and long stretches of fragile wetlands.

At the public hearing in Baton Rouge on Thursday, the first speaker, Cory Farber, project manager of the Bayou Bridge pipeline, said it was expected to create 2,500 temporary jobs. When Farber then said the project would produce 12 permanent jobs, the crowd laughed heartily. “Those who have airboat companies and equipment companies that specialize in putting in equipment, they’re not opposed to pipelines because of the short-term jobs,” said Jody Meche, president of the state Crawfish Producers’ Association, one of dozens who spoke at the hearing. “But once that pipe is in there, the jobs are gone.”

Debate was fierce. Pro-pipeline speakers – oil industry reps, state representatives, a retired Louisiana State University professor – pointed out that many pipelines already run through the Atchafalaya Basin and said pipelines were in general the safest way to transport oil – in the case of the Bayou Bridge pipeline, 280,000 barrels per day of crude to the Gulf coast region, with the potential for 480,000. Where most in attendance worried about potential oil spills and their effect on drinking water, Meche was more concerned with ways existing pipelines have, he said, “crippled” the fishing industry. “They excavated the trench that they put the pipe in and then [they didn’t clean up] and it leaves a dam behind that blocks the water flow,” he said on the microphone, “until there’s not enough oxygen in the water for the crawfish, the fish, or anything.”

Native Americans dotted the crowd, many of them fresh from Standing Rock. “The Native Americans in North Dakota get a lot of credit for showing people their power,” Eustis said. Lifelong Iberia Parish resident Andrea Kilchrist, 71, described the violence she had witnessed at Standing Rock: peaceful protesters battered with sonic grenades, tear gas, mace, and cannons. “If you think this company is not going to do the same thing here — it’s going to do the same thing here,” she warned the room. “I hate pain. I’m afraid of pain and broken bones,” she continued, her voice shaking. “But on that first day, if y’all give that permit, I will be sitting in front of a bulldozer.”

As activists see it, Louisiana residents are starting to really care about environmental issues and, more importantly, to make themselves heard. “A lot of times we don’t get this opportunity to speak up,” said Eustis, still admiring the surprisingly large crowd. “[These oil companies] want to just roll over us. “But after Katrina, and the BP spill, and the Baton Rouge flood last year – 100,000 people displaced from their homes because of climate change – I guess we’re finally just sick of this.”[26][27]

January 13, 2017: Details Emerge in Deal to End Multi-Million Dollar Lawsuit by State of Oklahoma Against Phillips 66 for Alleged "Double-Dipping" into a Petroleum Storage Tank Cleanup Fund

Details Emerge in Deal to End Multi-Million Dollar Lawsuit by State of Oklahoma against Phillips 66 for Alleged "Double-Dipping" into a Petroleum Storage Tank Cleanup Fund. The state of Oklahoma received $2.8 million and an outside law firm working on contingency for Oklahoma Attorney General Scott Pruitt received $942,000 from a little-publicized settlement with Philips 66 over alleged "double-dipping" into a petroleum storage tank cleanup fund. Photo:Cleanup work on removing old underground storage tanks that held petroleum products. EcologyWA Flickr Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

NewsOK reported on January 13, 2017 that the state of Oklahoma received $2.8 million and an outside law firm working on contingency for Oklahoma Attorney General Scott Pruitt received $942,000 from a little-publicized settlement with Philips 66 over alleged "double-dipping" into a petroleum storage tank cleanup fund. Pruitt's lawsuit alleged Phillips 66 had collected money from the indemnity fund even after it used private insurance proceeds for the environmental remediation. Pruitt, who typically issues news releases touting legal victories, didn't publicize the settlement award or issue a news release. The only public mention of it came in meeting minutes at the Oklahoma Corporation Commission. The settlement agreement doesn't specify how much of the award went to the outside law firm, only that "the Oklahoma attorney general shall be responsible for paying any attorney fees." The Phillips 66 case and others like it have been touted by Pruitt supporters as an example of the attorney general being willing to go after energy companies. Related lawsuits against BP and Chevron over indemnity fund payments were filed by his predecessor in late 2010.[28]

Phillips 66 previously paid $2 million in 2014 to settle allegations it helped itself to Utah’s Petroleum Storage Tank Fund for cleaning up damage from leaking fuel storage tanks even though it had insurance to cover the cleanups. Phillips was said to have relied on the fund for cleanups at 82 service stations. Consistently, these guys were saying, ‘No, we don’t have any insurance,” said Therron Blatter, a branch manager for underground storage tanks at the Utah Division of Environmental Response and Remediation. “Clearly, they did have the insurance.”[29]

According to the Salt Lake City Tribune Phillips 66 was accused of defrauding the Utah’s Petroleum Storage Tank Fund to the tune of $25 million for cleanups associated with leaking underground tanks. In its lawsuit filed in 2012, the division alleged ConocoPhillips collected $25 million in payouts to cover cleanups at 82 service stations by falsely reporting that these sites were not covered by independent insurance. The suit sought to recover this money, plus punitive damages and fines totalling $10,000 for every day ConocoPhillips violated the law. But as lawyers gathered evidence it became apparent some of the claims were not that strong, said Brent Everett, director of the state Division of Environmental Response and Remediation. Officials said they are satisfied with the $2 million settlement, which amounts to less than 10 percent of what they originally claimed was misappropriated.[30][31]

January 12, 2017: Showdown Looms Over Phillips 66 Funded Bayou Bridge Pipeline

The Greater Baton Rouge Business Report reported on January 12, 2017 that the $750 million Bayou Bridge Pipeline project being jointly pursued by subsidiaries of Phillips 66, Sunoco Logistics and Energy Transfer Partners, will face off against environmentalists at a public hearing on January 12, 2017 over the proposed 162-mile Bayou Bridge pipeline, which, if approved, will run from Lake Charles through the Atchafalaya Basin to St. James Parish. Advocates of the project are expected to argue that pipelines are the safest, most environmentally friendly and cost effective way to transport oil, noting also that the proposed pipeline will join an existing network of pipelines crisscrossing the state. “This is not the first pipeline that will run through the Atchafalaya,” says Tommy Foltz, executive vice president of the Consumer Energy Alliance.

But environmentalists are expected to take issue with the claim that pipelines are safe. Anne Rolfes with the Louisiana Bucket Brigade, who will be among those attending tonight’s hearing, notes that Louisiana had 144 pipeline accidents in 2016. “Our pipelines are falling apart,” Rolfes says. “They are leaking. They have holes in them. They are rusty and corroded. Our state should be forcing industry to repair the current pipelines rather than permit a new one.” The state should also be exploring alternative fuel sources like solar and wind energy, which represent the economic development opportunities of the future, Rolfes says. “One of the fastest growing sectors of job growth is in renewable energy and we’re dealing with these guys who are stuck thinking about fossil fuels,” she says.[32]

January 12, 2017: Six Environmental Groups Join Against Phillips 66 Lawsuit Regarding Santa Maria Rail Project

Edhat Santa Barbara reported on January 12, 2017 that six environmental groups were granted permission to intervene in a lawsuit brought by Phillips 66, challenging the San Luis Obispo County Planning Commission's denial of the company's proposal to construct a crude oil train terminal for the Santa Maria Refinery. Phillips 66's lawsuit challenges the Planning Commission's determination that the site for the proposed oil train terminal contains rare and valuable habitat that is protected under the California Coastal Act and the County's local policies and ordinances. In granting the motion to intervene, the court ruled that the groups have an interest in protecting the environment as well as an interest in participating in further hearings on the project. The court allowed the environmental groups to join the lawsuit so that they could "continue to participate in and protect the environmental review process" as it relates to the Phillips project and the determination that the project would impact environmentally sensitive habitat. Now that the environmental groups are parties to the lawsuit, they plan to file a motion asking the court to dismiss the case as premature. The hearing on that motion is scheduled for February 16, 2017.[33]

October 22, 2016: Eighty Arrested at Protest Against Phillips 66 Funded Dakota Access Pipeline

UPI reported on October 22, 2016 that police in North Dakota arrested 83 protesters after violent clashes at the construction site of the Dakota Access pipeline. The protest happened in rural Mandan, N.D., where workers are installing the 1,172-mile oil pipeline that will run from the oil fields in North Dakota south as far as Illinois. A group of protesters walked some three miles off the nearest road with a large all-terrain vehicle, slashed its tires and fastened themselves to the machine, according to the Bismarck Tribune. One individual chained herself to the steering wheel. Another man put his arm through a hole in the vehicle's door, than put his hand in a bucket of dried cement.

When police arrived on scene, a group of 300 or so protesters, Native Americans who view the construction as a violation of their sovereignty along with environmentalists, refused to leave. Police formed a line near the protesters and some tried to breach the line; officers responded with the use of pepper spray. Two officers were injured, though not seriously, in the confrontation. Police said they used the least amount of force possible to remove the protesters from private property. "We want to use the most nonlethal method possible," Morton County Sheriff's Department Rob Keller told the Bismarck Tribune. It took police about five hours to clear the scene of protesters so work in the area could resume. WDAZ-TV reported protesters were mostly charge with a combination of assault on a peace officer, reckless endangerment, criminal trespass, engaging in a riot, resisting arrest and fleeing an officer on foot.[34]

Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.

October 20, 2016: Phillips 66 Appeals Santa Maria Rail Project to San Luis Obispo County Supervisors

The San Luis Obispo Tribune reported on October 20, 2016 that Phillips 66. has appealed San Luis Obispo County Planning Commission’s rejection of its oil-by-rail plan to the county Board of Supervisors, setting the stage for lengthy and passionate hearings over a project that has drawn statewide attention. Phillips 66, in its appeal filed Wednesday afternoon, also is asking county supervisors to set aside the issue while it seeks an order from San Luis Obispo Superior Court that would direct the county planning department to correct what Phillips 66 says are misapplications of county land-use rules. The petition, filed Wednesday in Superior Court, also asks the court to direct the Planning Commission to set aside its findings for denial and reconsider Phillips 66’s application. A case management conference is set for Dec. 5. The Planning Commission voted 3-2 on Oct. 5 to reject the project, with Commissioners Don Campbell and Jim Harrison dissenting. Commissioner Jim Irving joined Commissioners Eric Meyer and Ken Topping on Wednesday to deny the plan.

In the meantime, environmental groups are gearing up for another fight. One such group, 350 Silicon Valley, is part of a statewide coalition of climate organizations focused on stopping the Phillips 66 project and plans to give county supervisors numerous reasons to reject the proposal, said Stew Plock, development manager for the group.[35]

October 5, 2016: San Luis Obispo County Planning Commission Votes to Deny Phillips 66 Santa Maria Rail Spur Project

KCBX reported on October 5, 2016 that the proposal by Phillips 66 to increase the number of trains bringing crude oil to its Santa Maria refinery will not move forward with a recommendation by the San Luis Obispo County Planning Commission with three out of five Commissioners voting to deny the request to build a rail spur at the facility. Mesa Refinery Watch Group Spokesperson Laurance Shinderman said that the issue is now likely headed to the San Luis Obispo County Board of Supervisors, but believes the recent vote helps set a tone for future debate. "When you have the planning staff saying no to it, and now the planning commissioners saying not to it...the sentiment seems to be leaning our way," said Shinderman.

Phillips 66 Spokesperson Dennis Nuss sent a statement to KCBX via email: "We presented a strong proposal, and will review the concerns raised today and consider our options, including the right to appeal."[36]

September 7, 2016: Couple Blames Phillips 66 for Husband's Injuries at Wood River Refinery

The Madison Record reported on September 7, 2016 that Joe Hemmer and Nicole Hemmer filed a lawsuit Aug. 25 in Madison County Circuit Court against Phillips 66 Company alleging negligence in not protecting workers in its Wood River refinery. According to the complaint, on Aug. 26, 2014, Joe Hemmer was working at defendant's facility as an iron worker under the employment of Federal Steel & Erection Company when he collapsed near the defendant's exhchanger, suffering severe brain damage due to excessive heat. The plaintiffs allege Phillips 66 failed to inspect for the dangerous conditions in its working area, negligently allowed the dangerous condition to exist and negligently allowed toxic chemicals to be present in plaintiff's working area. and are seeking judgment of more than $50,000, plus court costs.[37]

August 27, 2016: Court Battle Brews over Phillips Funded Sacagawea Pipeline Under Lake Sakakawea

Court Battle Brews over Phillips Funded Sacagawea Pipeline Under Lake Sakakawea. The Mandan, Hidatsa and Arikara Nation asserts that Sacagawea Pipeline Company, a joint venture owned 50 percent by Phillips 66 Partners, was required but failed to get the tribe's permission to begin pipeline construction under under Lake Sakakawea. The Tribal Business Council voted August 3, 2016 to issue a cease and desist order to halt all construction under Lake Sakakawea. Lake Sakakawea is the drinking water source for several western North Dakota cities, including communities on the Fort Berthold Indian Reservation. Photo of Lake Sakakawea. North Dakota Parks and Recreation Flickr Creative Commons Attribution-NonCommercial-NoDerivs 2.0 Generic (CC BY-NC-ND 2.0)

The West Fargo Pioneer reported on August 27, 2016 that the Mandan, Hidatsa and Arikara Nation asserts that Sacagawea Pipeline Company, a joint venture owned 50 percent by Phillips 66 Partners, was required but failed to get the tribe's permission to begin pipeline construction under under Lake Sakakawea. The Tribal Business Council voted August 3, 2016 to issue a cease and desist order to halt all construction under Lake Sakakawea. Lake Sakakawea is the drinking water source for several western North Dakota cities, including communities on the Fort Berthold Indian Reservation. "Paradigm was informed on several different occasions that the consent of the MHA Nation would not be granted unless there were adequate assurances that an oil pipeline under the lake posed no threat to the MHA Nation's water resources," Tribal Chairman Mark Fox wrote in an Aug. 8 letter. "To date, that assurance has not been provided to the MHA Nation's satisfaction." Paradigm filed a federal lawsuit on Aug. 19 against Fox and Tribal Police Chief Nelson Hart arguing they have no authority to halt construction. The company is constructing two 70-mile companion oil and natural gas pipelines that will travel from McKenzie to Mountrail counties.

The Sacagawea Pipeline is also under investigation by federal pipeline regulators after former contractors said the pipeline was installed under the lake without being properly inspected. The owner of Boyd & Co. told Forum News Service the pipeline was properly inspected and he says the claims are false accusations made by workers who were fired. About 8,980 feet of the pipeline system will pass under Lake Sakakawea via the installation of about 10,980 feet of welded steel pipeline, the Corps of Engineers said in its environmental assessment. The pipeline will be installed at least 100 feet below the lakebed through horizontal directional drilling with emergency shut-off valves on either side of the lake and around-the-clock pipeline monitoring to detect leaks.[38][39][40]

August 27, 2016: Worker Killed in Accident on Phillips 66 Funded Dakota Access Pipeline

The Associated Press reported on August 27, 2016 that a man working on the four-state Dakota Access Pipeline, funded in part by Phillips 66, was killed in an apparent accident in western North Dakota, said North Dakota Public Service Commissioner Brian Kalk. Kalk said the man was on a tractor Thursday, covering the underground pipeline with soil and grass seed. Kalk said the company reported Friday that the man suffered a serious head injury, apparently while working on equipment. He was taken to a Minot hospital, where he died.[41] Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.

August 24, 2016: Native Americans Wait on Court Decision on Controversial Phillips 66 Funded Dakota Access Pipeline

Native Americans Wait on Court Decision on Controversial Phillip 66 Funded Pipeline. At least 300 people opposed to a controversial Dakota Access Pipeline, funded in part by Phillips 66, waited anxiously outside a D.C. federal courthouse this afternoon for a decision on whether or not the project can to continue. And now they’ll have to wait just a little longer. The Standing Rock Sioux Tribe filed a lawsuit against the Army Corps of Engineers on July 27 to stop the pipeline that would cross under the Missouri River, the reservation’s sole source of water. Photo: Sierra Club

PBS reported on August 24, 2016 that at least 300 people opposed to the controversial Dakota Access Pipeline, funded in part by Phillips 66, waited anxiously outside a D.C. federal courthouse this afternoon for a decision on whether or not the project can to continue. And now they’ll have to wait just a little longer. The Standing Rock Sioux Tribe filed a lawsuit against the Army Corps of Engineers on July 27 to stop the pipeline that would cross under the Missouri River, the reservation’s sole source of water. The corps approved the pipeline last month, but the tribe argues they were not properly consulted, and that cultural and historical sites would be destroyed during construction. Judge James E. Boasberg from the United States District Court for the District of Columbia said he will make a decision about the $3.7 billion Dakota Access Pipeline on or before September 9. “We’re very concerned because construction is ongoing,” said Jan Hasselman, a lawyer with EarthJustice, an environmental advocacy organization representing the Standing Rock Sioux Tribe. “In another couple of weeks or a month there won’t be anything left to protect.” The tribe, whose land is located a half-mile south of the pipeline, has resisted the project for months. People started gathering near the construction site in Cannon Ball, North Dakota, in April to stage demonstrations. In recent weeks, hundreds more arrived, and some sparked confrontations with police and construction workers. At least 28 people people were arrested for disorderly conduct and trespassing this month. The pipeline company says it halted work after some demonstrators attacked workers with rocks and bottles. With the legal ruling delayed until next month, it is uncertain what will happen at the site and to the several hundred protesters camped nearby. “We have to play by the rules the federal government has given us,” David Archambault II, chairman of the Standing Rock Sioux Tribe, told PBS NewsHour. “We’re still going to pray and be in peace and ensure our strength in unity is powerful.”[42]

August 24, 2016: Iowa Farmers Complain that Phillips 66 Funded Dakota Access Pipeline Wrecks Their Soil

The Des Moines Register reported on August 24, 2016 that some Iowa farmers want builders of the 1,154-mile Dakota Access pipeline, owned in part by Phillips 66, to put their soil back the way they found it. Francis Goebel now has a scar running across his soybean fields where the dark, fertile topsoil is being stacked on top of several feet of hard clay mixed with clay loam and fear his soil will less suited for growing crops — and much less valuable. "Nature separated those soils for a reason, that's the way I feel," said Goebel, who runs a 164-acre century farm in Sioux County. "If nature put it there, they should put it back the way it was." Although Dakota Access is separating the rich topsoil from the soil beneath, it isn't being as careful with the next two layers, mixing the clay loam subsoil with the hard clay underneath. Goebel acknowledges he was well compensated by Dakota Access for the 12-acre easement the company obtained to cross his land. He received $21,000 per acre for the easement, plus payments for initial crop losses. But he's worried about his future corn and soybean yields. In some places, crews excavated 20 feet deep, meaning the hard clay at the bottom could end up just a couple feet from the ground. "To me, it's a scar."

Tom Konz acknowledges that it is too late for his and his neighbor's land — contractors buried the pipe last week. But he wants other Iowa landowners in the pipeline's path to remain vigilant about their soil as crews begin tearing into the ground. Konz received about $102,000 from Dakota Access, a figure that included payments for the easement, plus three years' worth of crop damage. But he said that's nothing compared with the ongoing costs of anticipated crop losses. "The rest of my life, I guarantee you will see that pipeline forever," Konz said. "It will come up as red (on a yield map). We'll fight it every year for yield loss."

But Dakota Access attorney Bret Dublinski noted that all the contested farms already had tile buried under crops to help drain fields. It is often removed, repaired and replaced, he said. "You cannot consistently argue both that Dakota Access is going to irreparably harm my soil because it hasn’t been changed in 1,000 years and then also say 'I'm concerned about my pattern tile that I put in by turning up the soil,'" Dublinski said. "… Those are arguments that simply cannot exist in the same space."[43]

August 23, 2016: Hundreds of Native Americans Continue Months-Long Protest Against Phillips 66 Funded Dakota Access Pipeline

Native youth and supporters protest in New York against Dakota Access Pipeline. Sioux youth from the Standing Rock Indian Reservation in North Dakota rallied with supporters in Union Square after running 2,000 miles across the United States to protest the proposed Dakota Access Pipeline. Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners. Photo by Joe Catron Flickr Creative Commons. Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

Nasdaq reported on August 23, 2016 that construction will remain halted on the 1,154-mile Dakota Access pipeline, owned in part by Phillips 66, as a federal judge postponed a hearing to determine whether protesters should be prevented from accessing the site near the Missouri River. Tensions between the Standing Rock Sioux tribe, which opposes the pipeline, and local police have escalated in recent weeks. More than two dozen protesters have been arrested after they blocked entry to the site 34 miles south of Mandan, N.D. The pipeline's developer, Dakota Access LLP, has filed a lawsuit seeking to block protesters from the site. Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.

A coalition of Native American groups that oppose the pipeline sent out an appeal to human rights groups to come to the North Dakota site, calling the situation a crisis. The Standing Rock Sioux argue that the pipeline threatens sacred sites and poses a risk to the tribe's drinking-water supply, since they say the pipeline would cross the Missouri River just upstream from the reservation. "We are committed to peaceful defense of our water and our territory," the groups said.[44]

According to Jack Healy writing in the NY Times, people have been gathering since April, but as hundreds more poured in over the past two weeks, confrontations began rising among protesters, sheriff’s officers and construction workers with the pipeline company. Local officials are struggling to handle hundreds of demonstrators filling the roads to protest and camp out in once-empty grassland about an hour south of Bismarck, the state capital. The pipeline company says it was forced to shut down construction this month after protesters threatened its workers and threw bottles and rocks at contractors’ vehicles. Leaders from the Standing Rock Sioux tribe, whose reservation lies just south of the pipeline’s path, say the protests are peaceful. Weapons, drugs and alcohol are prohibited from the protest camp. Children march in the daily demonstrations. The protesters sleep in tents and tepees, cook food in open-air kitchens and share stories and strategies around evening campfires. There is even a day care. At morning meetings, speakers warn parents to keep their children away from the Missouri River at sunset, and remind one another they are camped out in prayer. For many, the effort was about reclaiming a stake in ancestral lands that had been whittled down since the 1800s, treaty by broken treaty. “Lands were constantly getting reduced, shaken up,” said Dave Archambault II, the tribal chairman of the Standing Rock Sioux. “I could give you a list of every wrongdoing this government did to our people. All of that is frustration pent up, and it’s being recognized.”

Energy Transfer Partners says it has the necessary state and federal permits and hopes to finish construction by the end of the year. The pipeline’s route starts in the Bakken oil fields of western North Dakota and ends in Illinois. The United States Army Corps of Engineers says it consulted extensively with tribes, including the Standing Rock Sioux, and it says that tribe has failed to describe specific cultural sites that would be damaged by the pipeline.[45] Builders say the pipeline will enable domestically produced light sweet crude oil from North Dakota to reach major refining markets in a more direct, cost-effective, safer and environmentally responsible manner. The pipeline will also reduce the current use of rail and truck transportation to move Bakken crude oil to major U.S. markets to support domestic demand. Shippers will be able to access multiple markets, including Midwest and East Coast markets as well as the Gulf Coast via the Nederland, Texas crude oil terminal facility of Sunoco Logistics Partners. According to Energy Transfer, the company holds their pipelines to a standard that exceeds state and federal regulations performing routine ground and aerial leak inspections about every 10 days, when federal rules only require these inspections every 14 days.[46]

August 17, 2016: Phillips 66 Seeks 6 Months Delay in Hearing for Santa Maria Refinery Rail Spur Project

The New Times reported on August 17, 2016 that after months of lengthy hearings on Phillips 66’s project, which would allow the company to bring in crude oil by train to its Santa Maria Refinery, Phillips 66 requested that a planned comission meeting on its proposed rail spur extension project scheduled for Sept. 22 be pushed back until March 2017. Phillips said it wanted to wait until the Federal Surface Transportation Board ruled on a petition involving an oil train-related project in Benicia. The company in charge of that project, Valero, is seeking declaratory relief from the three-person federal board after the oil company’s proposal to transport 50 trains per-day carrying crude oil through the city was denied by the Benicia Planning Commission and appealed to its City Council. At the heart of the Benicia case is the issue of pre-emption, or the extent of a local government’s authority over interstate rail transportation, which is the purview of federal government. The same issue is at play in San Luis Obispo. The hearings on the Phillips 66 project featured discussions over the county’s ability to set limits or conditions on the project. “In the interest of efficiency of the commission as well as the planning staff, we believe it would be prudent to further continue the hearing on Phillips 66’s Rail Spur Extension Project until March 2017, so that all parties can benefit from the direction expected from the Surface Transportation Board,” the letter from Phillips read.[47]

Local activists fiercely oppose the Phillips project. Opponents of Phillips 66's plan to bring oil trains to Santa Maria Refinery gathered for a "Stop the Oil Trains Rally" on July 9, 2016 at Mitchell Park in downtown San Luis Obispo. Guest speakers at the rally included Arlene Burns, mayor of Mosier, Oregon, who talked about her experiences being a part of a blast zone after a Union Pacific Railroad train, towing cars filled with crude oil, derailed and exploded near her community. Fourteen cars were involved in the June 4 Columbia River Gorge accident, causing the evacuation of schools in Mosier and the shutdown of Interstate 84 between Hood River and The Dalles.[48]

August 5, 2016: Former Worker Says Phillips Funded Sacagawea Pipeline at Risk for Oil Leak

The Dickinson Press reported on August 5, 2016 that a former crew member on Sacagawea Pipeline under construction in North Dakota claims that pipe installed under Lake Sakakawea was not properly inspected and he fears the lake could be at risk. The Sacagawea Pipeline Pipeline is being constructed by Sacagawea Pipeline Company, a joint venture owned 50 percent by Phillips 66 Partners. Federal pipeline regulators are investigating the allegations, which were also brought to the North Dakota Public Service Commission’s attention this week. The owner of the pipeline contracting company stands by the work and says the claims are false accusations made by workers who were fired. Pipeline contractor Kenny Crase writes in a sworn statement filed with the PSC and federal regulators that he was ordered to skip a final coating inspection on a section of the Sacagawea Pipeline before another contractor installed the pipe under Lake Sakakawea in July. External coating protects the steel pipe from corrosion. “To me, it’s an accident waiting to happen,” Crase said in an interview with Forum News Service.

Crase says he has 34 years of construction industry experience including working for five years in North Dakota as a pipeline inspector. On this job, he was in charge of operating a device known as a holiday detector, which finds defects or bare metal spots in the pipe coating. “The coating is on it to protect it from rusting from the outside in,” Crase said. Crase said the coating crew was not allowed to complete their work. In addition, the crew was told to stay in their trucks and not allowed to do a final inspection of the coating as another contractor installed the pipe under the lake, Crase said. “I cringed when they hooked to it and pulled it because we never made a single run through there when we didn’t find holidays, which is bare metal,” Crase said. “If I was a betting man, I’d bet there’s bare metal spots.”

Mike Boyd, owner and CEO of pipeline contractor Boyd & Co., disputes the claims. Boyd said there was a section of pipe that did not meet the standards, but those workers were fired and the coating work was redone “to perfection.” The work was also approved by inspectors working for Paradigm Energy Partners, which is part of Sacagawea Pipeline Co., Boyd said. “I have 100 percent confidence in the job that was done,” Boyd said. “It’s going under the lake, we have to do it right.”[49][50]

July 22, 2016: Phillips' Santa Maria Rail Spur Project May Be in Jeopardy

The San Luis Obispo Tribune reported on July 22, 2016 that Phillips 66 has been given an August 15 deadline to give the San Luis Obispo County department of planning and building additional information about the Santa Maria Rail Spur Project and to pay more than $240,000 in fees or the project application will be withdrawn. County policy requires that development applicants pay all the county’s costs in processing their permit, including the cost to hire consultants and write an environmental impact report. The county has estimated the cost of processing the application through the Board of Supervisors appeal hearing to be $240,697.73. In a July 8 letter to the company, county supervising planner Ryan Hostetter wrote, “This letter serves to inform Phillips 66 that without the necessary information and funding, the county cannot complete processing the application as directed by the Planning Commission.” As of July 22, the county had received only part of the information it has requested and none of the money, Hostetter said. Phillips 66 did not respond directly to questions by The Tribune on Friday as to whether the company plans to meet the county’s Aug. 15 deadline to pay the fees and provide the missing information. Instead, it sent this statement: “Phillips 66 presented a strong proposal, and we remain confident about the project,” the statement said. “We understand and respect the review and approval process with the county, and look forward to the next step in the EIR process.”

Phillips 66 also faces questions regarding their recent decision to truck oil directly into the refinery which according to the county is likely a violation of the county’s permit and will require a new permit as well as a trucking plan detailing the new oil-by-truck method. “Bringing in crude by truck is a modification of the refinery and, additionally, may have the potential to cause significant impacts,” Hostetter said in a June 30 letter to Phillips 66. The refinery’s maintenance supervisor, James Anderson, responded to the county in a letter dated July 14 in which he denied the assertions that the trucking of oil is a modification of the refinery and disputes the notion that a trucking plan is required. The letter refers to the refinery’s official name, the Santa Maria Refinery. “Phillips 66 does not need any new permits or modifications to its existing permits to deliver feedstocks by rail to SMR (Santa Maria Refinery) in the manner in which it is currently performed,” Anderson’s letter stated. “Such activity has been a long-standing practice, albeit intermittent, and is not part of the rail extension project.”[51]

June 29, 2016: Boilermaker Sues Phillips 66 for Negligence at Wood River Refinery

The Madison Record reported on June 29, 2016 that James Mason filed a lawsuit June 22 in Madison County Circuit Court against Phillips 66 Company, ConocoPhillips WRB Partner LLC, Phillips 66 WRB Partners Holdings, Cenovus Energy US LLC and WRB Refining LLC, doing business as Conoco Phillips Wood River Refinery, alleging negligence in failing to provide a safe place to work. According to the complaint, on June 23, 2014, while in the course of working as a boilermaker at Conoco Phillips Wood River Refinery, Mason touched a wooden pole on which certain electrical equipment existed, causing him to be electrocuted and suffer serious injuries. The plaintiff alleges the defendants failed to keep the area in safe and proper condition to prevent electric shock, failed to repair electric equipment near the wooden pole and failed to ground the wooden pole to prevent shock.[52]

June 3, 2016: Western States Petroleum Association Sues State of California Over Emission Standards at Rodeo Refinery

Courthouse News Service reported on June 3, 2016 that the Western States Petroleum Association, or WSPA, sued the Bay Area Air Quality Management District in Contra Costa Superior Court, claiming the agency acted arbitrarily when it installed new rules aimed at curtailing emissions at five Bay Area refineries by 20 percent. The refineries include Chevron in Richmond, Tesoro outside of Convord, Phillips 66 in Rodeo, Valero in Benicia and Shell in Martinez. WSPA — along with Valero Refining, Tesoro Refining & Marketing and Phillips 66 — say the district did not perform the necessary environmental review, known as a CEQA analysis, when it implemented the new rules. It further asserts the mandate unfairly targets the oil and gas industry as the emissions reduction was not implemented in any other industry. The plaintiffs want the court to order the Bay Area Air Quality Management District to set aside the rules aimed at curtailing emissions at the five locations, as well as an injunction that prohibits the agencies from implementing certain provisions in the future. WSPA says the five refineries that comprise the Contra Costa-Solano refinery belt — the largest in California — account for less than three percent of air pollutants in the area.[53]

May 18, 2016: Opponents Vow to Stay in Fight Against Phillips 66 Santa Maria Rail Project

Chris McGuinness wrote in the New Times on May 18, 2016 that feelings ran high at the meeting of the SLO County Planning Commission when commission members moved forward with plans to approve a modified version of the proposed Phillips 66 rail spur project, with members of the audience booing commissioners who expressed their support of the project, and cheering those who did not. Heidi Harmon, a local activist and opponent of the project, said that the commissioners' actions at the meeting may have been disheartening but would also serve to further galvanize those who oppose it. "I think they were disappointed and disgusted, but not discouraged," Harmon said. "I think they were trying to thread the needle," said Laurance Shinderman, a member of the Mesa Refinery Watch Group, an organization that opposes the project. "They bought into Phillips' shell game. ... We were disappointed." Whatever the commission's final decision is, it can still be appealed to the SLO County Board of Supervisors, the California Coastal Commission, and eventually the court system. The project will come back before the Planning Commission Sept. 22, and will include reopening public comment.[54]

May 16, 2016: SLO County Planning Commission Agrees to Move Forward with Phillips 66 Santa Maria Refinery Rail Project

KSBY reported on May 16, 2016 that the San Luis Obispo County Planning Commission agreed to move forward with a proposal to extend a rail spur at the Phillips 66 Santa Maria Refinery. There was a consensus by straw vote to approve the project in the future but no formal vote was put on the record. Many people have expressed concerns over the safety risks associated with the project, which is expected to result in three oil trains traveling into the refinery each week. The commissioners suggested some conditions for the project that will be later formalized. Another Planning Commission meeting is scheduled for September 22, when the commissioners will open up those conditions for public comment. Even if the Planning Commission does give final approval to the project, it still would have to go through the County Board of Supervisors for an appeals process and then the Coastal Commission.[55]

May 3, 2016: Rancher Files Lawsuit Against Phillips 66 for Pollution from Pipeline from Santa Maria Refinery

Cal Coast News reported on May 3, 2016 that Rob Rossi, an owner of the more than 14,000 acre Santa Margarita Ranch, filed a lawsuit against ConocoPhillips and Phillips 66 on Friday for allegedly operating a pipeline that has contaminated a portion of his ranch. The pipeline extends 78 miles from Phillips 66's Santa Maria refinery to a junction pipe station in the San Joaquin Valley. In the years since the pipeline was constructed, the defendants removed or replaced the pipeline twice. During one of the maintenance projects, hydrocarbons were discovered to have leaked into the soil, according to the lawsuit. The Central Coast Regional Water Quality Control Board then opened an investigation that led to the discovery of oil related contaminants in the soil and groundwater in areas adjacent to the pipeline. The contaminates discovered showed that the leaks were not only historical but current, as some of the chemicals found were not added to oil until 2000, according to the lawsuit. In his lawsuit, Rossi is seeking that the defendants stop any continuing pipeline leaks, clean up any contamination from its pipeline on the property, reimburse Rossi for expenses related to the leaks, indemnify Rossi, pay damages for injury to the property, pay civil penalties for contaminating drinking water and pay Rossi’s legal costs. “Defendants’ petroleum hydrocarbon contamination on the headquarters property, in addition to posing a continuing threat to human health and the environment, has impeded and, until abated, will continue to impede Rossi’s ability to freely and beneficially use, enjoy and develop his property,” the lawsuit says.[56]

March 16, 2016: Lawsuit Against Phillips 66 Claims Gender Discrimination at Wood River Refinery

The Alton Telegraph reported on March 26, 2016 that Kimberly Helbig, a former employee of the Wood River refinery operated by Phillips 66, has filed suit claiming she was fired in retaliation for complaining about alleged gender and age discrimination. Helbig claims she was fired as an operator of a coker, which is a device used to process crude oil. She was the only female working on the coker, she claims, and her supervisors would excessively scrutinize her work and make intimidating comments and threats, she claims. Helbig claims one supervisor reprimanded her about using a radio, but did not reprimand the male co-workers for the same conduct. She claimed people would hide her equipment and clothing and that male workers would use the women’s restroom. Helbig complained the she was subjected to treatment designed to induce her to resign. Meetings with the human resources department did not resolve the problems. She said she felt she was being harassed but did not react for fear of retaliation. She was placed on disciplinary suspension pending investigation on February 6, 2015. She claims no reason was provided.

The Illinois Department of Human Rights dismissed a similar complaint filed by Helbig on December 17, 2015. The notice of dismissal claims there was not substantial evidence to support the allegations.[57]

March 11, 2016: Public Comment Closes on Phillips 66's Santa Maria Rail Project

KSBY reported on March 11, 2016 that more than 120 people, both proponents and opponents, took the podium for the final day of comment on Phillips 66's Santa Maria Rail Project. The first three days of public hearings drew more than 400 people from all around the state. "It's been a long day, it has been a long four weeks," said San Luis Obispo Planning Commissioner Don Campbell. "We are happy to begin deliberations now. We have a lot of information to go through."

In the previous hearings, hundreds of people spoke out, stating how the risk of a derailment would be catastrophic. Supporters of the proposal pointed to the company's safety record as well as the jobs that would be created from the extension. Commissioners will be reviewing comments received from the public and federal laws on the proposed project. They will also be meeting with the county's attorneys regarding local laws and other legal obligations if they decide to approve the project. "It's going to take us some time to digest what we've heard from the public and to review all the components before we can make a decision on the project," said Campbell.[58]

March 7, 2016: Phillips 66 Agrees to Pay $16K for Undisclosed Mailers

Associated Press reported on March 7, 2016 that Phillips 66 agreed to pay $16,000 to California’s campaign finance watchdog after secretly paying $41,000 for 17,000 mailers to Rialto residents in 2012. The mailers opposed a local tax increase on oil companies. Voters rejected the measure. An agreement released Monday shows attorneys for the Fair Political Practices Commission found Phillips 66 avoided disclosing its role by passing payments between two organizations. Phillips 66 told the state it believed its payments were legal, but attorneys for the agency decided it misled voters and warranted a penalty.[59]

February 25, 2016: Phillips 66 Soccer Park Opens Debate over Naming Rights in Whatcom County

The Bellingham Herald reported on February 26, 2016 that while County Council members says they did not want to diminish the generosity of the $700,000 donation from Phillips 66 Ferndale Refinery to rename the Northwest Soccer Park for 20 years, they deliberated handing the naming rights to a private entity without a countywide policy. Awarding the naming rights for a public facility is new for Whatcom County Parks and Recreation, which has no official policy for renaming facilities and doesn’t plan to draft one with any urgency. “It’s not high on our list,” explained Michael McFarlane, director of county parks and recreation. “We typically don’t have many opportunities for naming in the county park system.”

“Having naming rights on public land doesn’t feel totally right to me,” Mann said during the council’s Jan. 26 finance meeting. “This is obviously an incredibly generous and wonderful offer on the part of the corporation, and I don’t want to look a gift horse in the mouth, but I want to know what this means for the long-term future of having public facilities named after private corporations.” Council member Barbara Brenner, on the other hand, said she thought it was a great idea. “I think we should do more of this,” Brenner said. “It’s still county property. We’re not giving it away.” The members waited to vote on the matter until Feb. 9, by which point Mann said he supported the measure. “I think it’s important to have processes in place for this, and I think we’re going to work on that,” Mann said. “This donation is incredibly generous and I’m happy to vote yes on this.”[60]

February 4, 2016: Hundreds Condemn Phillips Santa Maria Rail Project in Public Hearings

The San Luis Obispo Tribune reported on February 4, 2016 that hundreds of local residents and others from around California attended a public hearing to urge the San Luis Obispo County Planning Commission to reject Phillips 66 Co.’s request to receive crude oil by rail at its Santa Maria Refinery. For several hours, planning commissioners heard appeals from 83 people — a combination of residents from San Luis Obispo County, and northern and southern California, as well as elected officials — all urging they reject a proposal to build a 1.3-mile spur with five parallel tracks from the main rail line to the Nipomo Mesa refinery, an unloading facility at the refinery and on-site pipelines. About 390 people had grabbed speaker comment slips as of Thursday afternoon, including those who spoke that day. Public comment will continue Friday and possibly to a future date, depending on how many of the speakers turn out. None of the 83 public speakers on Thursday spoke in favor of the Phillips 66 proposal. San Luis Obispo Mayor Jan Marx was among the elected officials or their representatives who urged denial of the project. “Whether it’s five or three trains, our city would be placed at unique risk to this project,” she said.

At lunch, about 600 people from around the state rallied across the street from the hearing to protest the project. Some supporters were seen too, with green “Protect Jobs” signs, but they were far outnumbered by opponents with “Stop Oil Trains Now” posters and signs proclaiming, “We Risk, They Benefit” and “Invest in Solar.”

Representatives from Phillips 66 urged the commissioners to approve an alternate plan to allow three trains a week instead of five. “The three-train-per-week project is now our proposed project,” said Jocelyn Thompson of Alston & Bird LLP. It “eliminates all of the Class 1 impacts with respect to onsite activities,” she added, referring to the highest level of negative impacts to air quality and biological resources referenced in the project’s final Environmental Impact Report. The county staff report states that three trains a week — or 150 a year — would reduce the significant toxic air emissions to no longer be considered a “Class 1 significant impact.” However, the county’s planning staff said other significant impacts still would harm the environment even with three trains per week rather than five: construction of the facilities would still disturb environmentally sensitive habitat, and emissions of diesel particulate matter would still remain a “Class 1” impact.

Thompson added that if the project is denied, crude oil will still come into California by rail and eventually reach the refinery, albeit by a different route: Oil would arrive in the Central Valley by train and then be trucked about 110 miles through San Luis Obispo County to Santa Maria, where it would be pumped into a pipeline and sent to the refinery. “It’s impermissible for you to say that you’re going to deny the project because there’s a train on the tracks,” she said. “The train will come to the San Joaquin Valley and you will be dealing with trucks.”

When asked during a break if layoffs could happen if the project is denied, Phillips 66 spokesman Dennis Nuss said, “We’re going to wait and see what is going to happen with the process.”[61]

January 14, 2016: Phillips 66 Fined $324,000 for Citations for Fire and Hazardous Chemical Safety at Ferndale Refinery Dating from 2014

The Bellingham Herald reported on January 14, 2015 that Phillips 66 was hit with a $324,000 fine by the state for several workplace violations revolving around fire and hazardous chemical safety at Ferndale Refinery. The refinery received the fine for violations that took place in 2014 and were not corrected, according to a news release from the Washington State Department of Labor & Industries.The 2014 citations are under appeal, but state law requires employers to correct hazards even if the violations are under appeal, according to L&I. The refinery was cited for three violations, each carrying a $108,000 fine. Two involve the refinery’s firefighting and fire suppression systems. According to the state agency, Phillips 66 did not inspect or follow recognized and generally accepted engineering practices for the firefighting water tank or the buried firefighting water distribution piping. The company also failed to address the potential loss of firefighting water, according to the report.

The third violation involved not consulting industry material before writing a policy about chemical piping. Following the company’s policies potentially allowed workers to be potentially exposed to hydrogen sulfide, a poisonous gas, and explosive flammable hydrocarbon vapors at much higher concentrations than considered safe. Employers in high-hazard chemical industries are expected to make sure that their internal policies and guidelines reflect current good engineering practices across those industries and that they meet local regulations, which may be stricter than national regulations.

Phillips 66 Ferndale Refinery spokesman Jeff Callender said company officials were disappointed by the announcement from the agency and believe there is a misunderstanding related to the citations. They plan to continue to work cooperatively with the agency through the appeals process. “The safety of the community, the environment and our people are of the utmost importance to our company and these priorities guide our efforts in everything we do,” said Callender.[62][63]

June 3, 2015: Residents of San Luis Obispo Protest Cuesta College Letters Supporting Phillips 66 Santa Maria Rail Project

The San Luis Obispo Tribune reported on June 3, 2015 that several community members called on the college board of Cuesta College to rescind letters of support written on offical college stationary by President Gil Stork and Athletic Director Robert Mariucci in support of a Phillips 66's proposal to move crude oil by rail to the Santa Maria Refinery. In their letters, Stork and Mariucci both note longtime support from Phillips 66 for college programs, including financial support of the women's basketball tournament for many years.

Project opponents argued that Stork and Mariucci should not have penned their support on college letterhead. Several people asked the Cuesta College Board of Trustees to oppose the project. "We urge the board to do the right thing and repudiate this letter and lend its name to the towns that have said no to this dangerous project," Nipomo resident Laurance Shinderman said. Stork told the board that he erred in using official letterhead but did not intend to retract the letter unless directed by the board to do so. "It is my opinion," Stork said. "Just because I don't have the same persuasion as the speakers here tonight doesn't make it wrong."[64]

May 8, 2015: California Fines Phillips and ConocoPhillips $11.5 Milion for Waste Violations

The San Fransisco Chronicle reported on May 8, 2015 that Phillips 66 and ConocoPhillips have agreed to pay the fine as part of a settlement of the violations, according to the final judgment filed Thursday in Alameda County Superior Court. The companies were accused of allowing 560 of their service stations in 34 counties to improperly operate and maintain underground gasoline storage tanks, endangering nearby water supplies. The violators included the 150 stations in the Bay Area, including 16 in San Francisco, authorities said. “This settlement holds Phillips 66 and ConocoPhillips accountable for this dangerous negligence and will ensure future compliance with environmental laws,” said Attorney General Kamala Harris. The complaint, filed in January of 2013, claims that the two affiliates failed to properly train employees and have not adequately maintained leak detection devices, tested secondary containment systems, conducted monthly inspections or maintained operational alarm systems since 2006.[65]

March 17, 2015: Recent Lawsuits Signal a Litigious Future for Santa Maria and Rodeo Refineries

Rhys Heyden writes in the Santa Maria Sun that three recent lawsuits filed in Contra Costa County against the Propane Recovery Project at Rodeo Refinery highlighted an important similarity between the two Philips 66 refineries. Namely, that Phillips operates a refinery in each county, and a proprietary pipeline links the two and that legal action has a direct connection to SLO County and the Santa Maria Refinery in Nipomo. “Folks who are watching the Santa Maria Refinery and its rail spur extension project should also keep a close eye on Rodeo,” said Roger Lin, an attorney representing environmental group Communities for a Better Environment (CBE) in one of the three suits. “We’ve always held the position that the two refineries are really just one whole.”

"In an oversimplified sense, Lin’s opinion is the nexus of the trio of lawsuits," writes Heyden. "Phillips 66 insists that a “propane recovery project” at the Rodeo Refinery and the rail spur project at the Santa Maria Refinery are discrete entities, and their opponents insist that the two projects are inextricable." “The county improperly ‘piecemealed’ its review of the [propane recovery] project from other related projects … designed to accommodate the switch from California crudes to out-of-state imports,” argues the SAFER suit. “People in SLO County, just like those in Contra Costa County, have the right to have all these impacts evaluated in one place,” said Marc Joseph, an attorney representing SAFER California. “It’s truly baffling that the powers that be refuse to analyze this project as a whole.”

“We’ve been saying all along that the fastest way to a conclusion is for Phillips 66 to just admit that these two projects are linked,” Lin said. “If Phillips 66 wants to shortcut this legal process and just tell the truth, we welcome that.” As for how Phillips 66—the prime mover of this entire situation—thinks legal action in Contra Costa County could affect its SLO County proposal, it’s anyone’s guess. In response to that exact question, Phillips spokesman Dennis Nuss simply answered, “We remain committed to the proposed Santa Maria rail project.”[66]

March 6, 2014: Phillips 66 Project Faces Additional Lawsuits Over Rodeo Refinery Propane and Butane Recovery Project

The San Jose Mercury News reported on March 6, 2015 that on March 4, 2015 Communities for a Better Environment sued the county and Phillips 66, contending the propane and butane recovery project at a Rodeo refinery is part of a grander plan to process heavy, dirty tar sands crude that would come to California by rail. On March 5, 2015 Rodeo Citizens Association filed suit in Contra Costa Superior Court, Martinez against Contra Costa County and the Phillips 66 Co., contending Phillips wants to transport heavy and dirty tar sands crude by rail from outside the state to a sister refinery in San Luis Obispo County and pipe the semi-refined oil to Rodeo. On March 5, 2015 Safe Fuel Energy Resources of California, a group representing workers at the Rodeo refinery, sued the county and Phillips 66 in Superior Court, Martinez, according to an announcement by the firm Public Good PR LLC. "Following two years of careful analysis by the Contra Costa County board (of Supervisors) and its expert staff, claims that this project is a crude by rail project were dismissed," said Phillips 66 spokesman Paul Adler.[67]

March 4, 2015: Rodeo Refinery Propane and Butane Recovery Project Subject to Legal Challenge

The Fort Bragg Advocate-News reported on March 4, 2015 that the environmental group "Communities for a Better Environment" has sued Contra Costa County over its approval of a propane and butane recovery project at a Rodeo refinery, contending it is a piece of a grander plan to process heavy, dirty tar sands crude that would come to California by rail. CBE has said that the refinery, with the acquiescence of authorities, seeks to "piecemeal" what the environmental group describes as "a tar sands refining project that could worsen pollution, climate, and refinery and rail explosion hazards." The EIR, CBE contends, "hid the project from the public and failed to mitigate its significant environmental impacts." Phillips 66 spokesman Paul Adler said Wednesday the company would be issuing a statement in response to the filing. Officials at County Counsel Sharon Anderson's office could not immediately be reached for comment.

Along with the Rodeo project's EIR, the Board of Supervisors on Feb. 3 rejected two appeals of a November 2013 county Planning Commission-approved use permit for the project. The appellants were CBE and the law firm of Shute, Mihaly and Weinberger on behalf of the Rodeo Citizens Association. The board vote was 4-1, with Supervisor John Gioia voting no.[68]

January 22, 2015: Teagan Clive Says Contra Costa County Recently Created a New Tax Base for Phillips 66 Reducing Payments from $3,900 per acre for their main lot to $42

Teagan Clive wrote a letter to the Martinez News-Gazette on January 22, 2015 reporting that according to Tax Assessor Gus Kramer, Phillips 66’s taxes were now based on “profits, not property.” Since the refinery owns 37 percent of the land in Rodeo, this went far to reduce their tax burden. Kramer couldn’t say off-hand how much Phillips has reduced their tax burden but public records show that, in 2014, they paid $3,900 per acre for their main lot and now they’re paying only $42 per acre. BOS Chairman John Gioia confirmed the new “profit-sharing” relationship with P66. "This begs the question: How can the BOS objectively vote on any matter concerning P66 – like the controversial Propane Project which is believed to involve notorious tar sands – if the County has become a “business partner”? Although Phillips ranks No. 6 on the Fortune 500, the County is now obliged to help them make money. This might explain why Supervisor Glover “lost” his long-time assistant, Paul Adler, who went to work for the refinery this month, in “government affairs.”"[69]

December 31, 2014: The Pros and Cons of a Controversial Phillips 66 Oil-by-Rail Project at the Santa Maria Refinery

Rhys Heyden wrote in the New Times on December 31, 2014 that Phillips 66's Santa Maria Refinery would like to transport much of its crude oil into San Luis Obispo County via train, while opponents would prefer such plans to be driven out of the county on a rail. "Many stakeholders adamantly support the project, while many locals virulently oppose the proposed rail spur that would allow this transportation method to materialize," writes Heyden. "There are plenty of lawyers involved and lots of money tied up in each side of the issue, and the project itself reaches far beyond the borders of SLO County."

Seeking to understand why many people support the project, New Times reached out to Phillips 66 to get their point of view. Though New Times requested a tour of the refinery and access to speak with a variety of Phillips 66 employees, the company—working with SLO-based PR firm Barnett Cox & Associates—declined to provide either, instead offering a presentation and interview with two company spokespeople. Essentially, Phillips argues that oil production in Santa Barbara County (the refinery’s predominant current source of oil at about 65 to 80 percent of total sourcing) is in decline. Anticipating further falloff, the company wants to diversify how it receives oil and where it receives it from.

Project adversaries disagreed with what they see as “specious” arguments from Phillips 66. They feel that the company has not been a good neighbor and is pursuing the crude-by-rail strategy primarily to enhance profits, not because any refinery jobs or the local oil supply are truly at risk. “There are just no grounds on which to support this project,” says Sierra Club leader Andrew Christie. “The impacts are understated, the EIR has been deficient from the start, and there are still 11 ‘significant and unavoidable’ impacts in a defective EIR.” All of these impacts are essentially due to the potential for high levels of toxic emissions from the oil trains or the mushrooming consequences of a possible crude oil spill and/or derailment.

Unsurprisingly for a project of this magnitude, many politicos polled by New Times said they saw the rail spur project likely being appealed by one side or the other—from the Planning Commission, to the Board of Supervisors, to the California Coastal Commission (the refinery is in the coastal zone)—and then likely being settled in court in a years-long struggle.“Ultimately, it comes down to this: Is what they’re proposing appropriate for the community, or are the impacts just too great?,” said District 3 Supervisor Adam Hill. “It will be interesting to see how that question is answered.”[70]

December 31, 2014: Tax Settlement Money from Wood River Refinery Has Been Distributed

The Alton Daily News reported on December 31, 2014 that the money promised in a settlement between Wood River Refinery and three taxing bodies has been distributed with $8.5-million going to the school district, $1.8-million to the village of Roxana, and almost $300,000 to the Roxana Community Park District. According to the terms of the agreement, none of those bodies had to repay taxes collected from the refinery in 2011 and 2012, and the refinery will have a lower assessed value for 2013. This settlement comes after the refinery objected to how much it paid in local property taxes from 2010 to 2011.[71]

December 23, 2014: Judge Rules That Phillips 66 Policy Prohibiting Santa Maria Refinery Employees from Talking to the Media Violates the Law

David Minsky reports at the Santa Maria Sun that on November 25, 2014 a National Labor Relations Board administrative law judge found that Phillips policy of prohibiting Phillips employees at the Santa Maria Refinery from speaking to reporters violated the law. According to case documents, attorneys representing Phillips 66 argued in court that the policy was meant to prohibit employees from speaking on the company’s behalf about any confidential operations. But the judge rejected this argument, saying the policy was ambiguous and violates the law because employees could “reasonably construe” that it would prohibit them from discussing, among other things, labor disputes or conditions of work. Reached by email last week, Phillips 66 spokesperson Dennis H. Nuss said the company is aware of the recent decision, but didn’t make specific comments about the case. However Nuss did write: “Our company’s top priority is the safety of everyone who works at our sites and lives in our neighboring communities. In 2012, Phillips 66 redistributed certain safety-related functions and responsibilities among personnel at the Santa Maria Refinery, and there were no staff reductions. These changes have helped maintain and improve the refinery’s high standards for safety performance.”[72]

December 2, 2014: Yellowstone County Reduces Phillips 66’s Tax Bill for Billings Refinery after Settlement

The Billings Gazette reported on December 2, 2014 that Yellowstone County will be disbursing about $3.3 million in protested taxes from the Phillips 66 oil refinery in Billings after the company and the Montana Department of Revenue settled a tax dispute. After making adjustments based on the settlement, the county will return $1.8 million, plus interest, to Phillips 66 and distribute $1.4 million to local taxing jurisdictions. The settlement, said county assessor Max Lenington, resulted in amended valuations for the refinery. The appraised value for 2014 was reduced by $82 million to $579 million, he said. And the appraised value for 2013 was reduced by $114 million to $599 million. Phillips 66 protested its 2013 taxes but paid its 2014 taxes at about the time of the settlement. Lenington said the 2014 tax statement will be corrected to reflect the settlement and re-sent. The settlement reduced the 2014 taxes from $9.3 million to $7.9 million, he said.[73]

November 20, 2013: Village of Roxana Will Not Have to Repay Million of Dollars to Philips 66 in Wood River Refinery Tax Assessment Case

The Alton Daily News reported on November 20, 2014 that the local school district of the village of Roxana will not have to repay millions of dollars that the Madison County State’s Attorney says it overtaxed Phillips 66 for the Wood River Refinery. An agreement between numerous taxing bodies and the owners of the Phillips 66 Wood River Refinery has been reached that would eliminate repayment for taxes collected in 2011 and 2012, and lower the refinery’s 2013 assessed value by about $100-million. Phillips filed an objection earlier this year over the amount of taxes levied by the Village of Roxana, the Roxana Park District, Roxana Library District and the Roxana School District. Parties still have to sign off on the agreement.[74]

August 5, 2014: Yellowstone County Distributes Protested Taxes From Phillips 66

The Billings Gazette reported on August 5, 2014 that with the settlement of several major tax disputes, millions of dollars in protested taxes have been distributed throughout Yellowstone County in one-time payments. Three of the recently resolved tax disputes involved Charter Communications, which protested tax years 2010-2013; Verizon Wireless, which protested years 2009-2013; and Phillips 66, which protested years 2010-2012. Phillips 66 protested a total of about $6.48 million and received a refund of $2 million, or about 32 percent. Tax protests remaining unresolved include about $3.29 million from Phillips 66 for 2013. While it is good to have the disputes resolved and taxes disbursed, said Yellowstone County Finance Director Scott Turner, there will be an overall decrease in the county’s base value because of the settlements. That means one mill levied will raise fewer tax dollars.[75]

July 30, 2014: Judge Grants Phillips Pipeline Access From Canada to Billings

Cheminfo reported on July 30, 2014 that Phillips will be able to continue operating three pipelines that transport crude oil from Canada after a judge granted access to the final land parcel whose easement had expired. Phillips 66 had negotiated access agreements with about 600 landowners and the tribe where the pipelines cross the Blackfeet Reservation, but filed a condemnation complaint in federal court against the owners of one parcel when negotiations failed. U.S. District Judge Sam Haddon ruled in favor of Phillips 66 and ordered the company to pay the landowners $1,450 in compensation for access to the final parcel concluding that the pipeline locations are reasonable and they are necessary for public use. The company said relocating the 8-inch and two 12-inch pipelines would have cost $2 million.[76]

May 28, 2014: International Tribunal Supports Phillips' Takeover of Coker at Sweeny Refinery

Fuelfix reported on May 28, 2014 that the International Chamber of Commerce’s Court of Arbitration has upheld Phillips 66’s right to exercise a call option in 2009 and assume Petroleos de Venezuela SA's (PDVSA) interest in Merey Sweeny LP. The partnership owns a 70,000-barrel- per-day delayed coker and related facilities at the refinery. “Certain defaults by PDVSA with respect to supply of crude oil to the Sweeny refinery triggered the right to acquire PDVSA’s 50 percent ownership interest,” says Phillips spokesman Rich Johnson. State-owned PDVSA initiated arbitration with the ICC, claiming the exercise of the call right was invalid. “Since there is not a lot of crude imported into the U.S. anymore, this decision hurts PDVSA on several fronts. First, the company loses the refinery and production, and secondly it loses the opportunity to bring crude into the refinery,” says Carl Larry.[77]

April 16, 2014: Health and Safety Specialists at Santa Maria Refinery Claim They Were Punished for Unionizing

Colin Rigley reported at the New Times on April 16, 2014 that health and safety specialists at Phillips' Santa Maria Refinery allege Phillips officials warned them in January, 2012 that if they joined the United Steelworkers Union they would lose hours, be stripped of managerial powers, and as many as three of them could lose their jobs. “The insinuation here was that, ‘We may not need all of you,’” one of the specialists said in a written statement submitted to the labor board.[78]

When the newly unionized group went to the bargaining table in December, 2012, the specialists say in a complaint filed with the National Labor Relations Board that Phillips management carried out its threats. Phillips' proposed contract on December 10, 2012 allegedly included the threatened reductions of hours and responsibilities. The refinery’s health and safety specialists serve as organizers of the plant’s emergency response crew. Though none of the health and safety specialists was fired, three of them were transferred from their primary roles into regular plant operations, according to the complaint. The union is seeking to recover lost wages for the health and safety specialists, and to have their original job functions restored. Those lost wages totaled as much as $17,000 per year for some employees. In its complaint, the union further alleges that Phillips 66 bargained in bad faith when it imposed the 2012 contract.[79]

Phillips 66, in its responses to the union’s complaint, said the company reduced the five health and safety specialists to two as part of regular staffing changes, and the job functions were distributed across other personnel. “There is no value more important in our company than ensuring the safety of everyone who works at our sites as well as the safety of our neighboring communities,” Phillips spokesman Dennis Nuss said in a written statement to New Times. “In 2012, Phillips 66 redistributed certain safety-related functions and responsibilities among personnel at the Santa Maria Refinery, and there were no staff reductions. These changes have helped maintain and improve the refinery’s high standards for safety performance.”[80]

In addition to the reduced contract for health and safety specialists, the union alleges that the company violated federal labor laws when it implemented “news media guidelines” in October 2012. Those guidelines instructed employees not to speak to news media and, “It is against company policy for anyone but an authorized company spokespersons [sic] to speak to the news media.” The company defends its policy as a routine business practice that violated no labor laws.[81]

March 26, 2014: Phillips Pays $500,000 Fine for Clean Air Violations at Five Refineries

CSP Daily News reported on March 26, 2014 that Phillips will pay a $500,000 penalty for violations of the Clean Air Act at the Sweeny Refinery in Old Ocean, Texas, the Alliance Refinery in Belle Chasse, La., the Wood River Refinery in Roxana, Ill., the Lake Charles Refinery in Westlake, La., the Borger Refinery in Borger, Texas, and several terminals across the country. Phillips also agreed to retire more than 21 billion sulfur credits that could have been used in the production of gasoline, which could potentially lead to significantly less pollution from vehicles. In a administrative settlement agreement, the EPA alleged that the company generated invalid sulfur credits between 2006 and 2012 and that Phillips failed to comply with recordkeeping, reporting, sampling and testing requirements at the five refineries. EPA discovered these violations during facility inspections and through a review of company records, which included the results of third-party company audits required by the Clean Air Act.[82]

March 10, 2014: Phillips Fined $239k for Air Quality Violations at Rodeo Refinery in 2008 and 2009

Denis Cuff reported in the Contra Costa Times that the Bay Area Air Quality Management District announced on March 10, 2014 that it had reached a civil settlement with Phillips for the payment of $230,900 in air pollution penalties for 19 air quality violations at their Rodeo Refinery in 2008 and 2009 that included late or missed flare gas samples, failure to install and inspect required emission controls on the wastewater system, and operating a storage tank while control valves were open.The refinery also exceeded hydrogen sulfide limits in fuel gas. "The air district has the responsibility to ensure that refineries operate their facilities in full compliance of air quality regulations to protect the health of local residents," said Jack Broadbent, the air district's executive officer. "Any violation of these regulations, no matter how minor, will not be tolerated."[83] Officials at Phillips said the company had disclosed most of the violations to the air district and fixed the problems quickly. "We continue to make improvements in our procedures, training and monitoring to minimize if not eliminate the likelihood of recurrence," said Janet Grothe, a spokeswoman for Phillips.[84]

February 28, 2014: Phillips Faces Compliance Hearing for Pollution Monitoring System at Rodeo Refinery

The Contra Costa Times reported on February 28, 2014 that the Contra Costa County Zoning Administrator will hold a compliance meeting on March 3, 2014 on the land use permit of the Phillips 66 Rodeo Refinery to determine if the fence line pollution monitoring system, deemed deficient in October, has been fixed. The system is supposed to function 95 percent of the time, according to an agreement between the refinery and an environmental working group that is a condition of a Clean Fuels Expansion Project. According to the staff report, a contractor found the monitoring system exceeded the 95 percent standard during four months of a 10-month period, and failed to meet the standard during six of those months.[85]

January 29, 2014: Phillips Settles Claim for Water Pollution Violations from Rodeo Refinery

The Contra Costa Times reported on January 29, 2014 that Phillips has agreed to pay $6,000 in fines to the state for exceeding discharge limits for selenium on two different occasions at its Rodeo refinery along San Pablo Bay that occurred on July 2, 2012 and September 5, 2012. Phillips agreed to waive its right to a hearing and to settle the matter under the board's Expedited Payment Program. The settlement is pending acceptance by the board's executive officer following a public comment period that runs until 5 p.m. on February 28, 2014.[86]

January 14, 2014: Phillips Settle Claims of Defrauding Utah State Fund of $25 Million for Cleanups of Leaking Underground Tanks

The Insurance Journal reported on January 14, 2014 that Phillips has paid $2 million to settle allegations it helped itself to Utah’s Petroleum Storage Tank Fund for cleaning up damage from leaking fuel storage tanks even though it had insurance to cover the cleanups. Phillips was said to have relied on the fund for cleanups at 82 service stations. Consistently, these guys were saying, ‘No, we don’t have any insurance,” said Therron Blatter, a branch manager for underground storage tanks at the Utah Division of Environmental Response and Remediation. “Clearly, they did have the insurance.”[87]

According to the Salt Lake City Tribune Phillips was accused of defrauding the Utah’s Petroleum Storage Tank Fund to the tune of $25 million for cleanups associated with leaking underground tanks. In its lawsuit filed in 2012, the division alleged ConocoPhillips collected $25 million in payouts to cover cleanups at 82 service stations by falsely reporting that these sites were not covered by independent insurance. The suit sought to recover this money, plus punitive damages and fines totalling $10,000 for every day ConocoPhillips violated the law. But as lawyers gathered evidence it became apparent some of the claims were not that strong, said Brent Everett, director of the state Division of Environmental Response and Remediation. Officials said they are satisfied with the $2 million settlement, which amounts to less than 10 percent of what they originally claimed was misappropriated.[88][89]

May 31, 2013: Phillips Continues Tax Protest of Billings Refinery

Clair Johnson reported in the Billings Gazette on May 31, 2013 that Phillips paid its second-half 2012 Yellowstone County property taxes of $3.9 million with $1.3 million protested while its long-running tax dispute with the state of Montana continues. Taxes paid under protest are held in an escrow account pending resolution of the dispute. Taxing jurisdictions can demand distribution of the protested taxes but may have to repay the money depending on how the issues are resolved. Phillips 66 appealed its tax assessment to the Yellowstone County Tax Appeals Board, which sided with the company. The Revenue Department then appealed that decision to the Montana State Tax Appeals Board, which has not yet ruled. Another oil refiner, CHS refinery in Laurel, paid $4.08 million, with $1.6 million paid under protest.[90]

April 19, 2013: DCP Pipeline Awaits Approval in Colorado

Steve Block reported in the Trinidad Times on April 19, 2013 that a proposed 13.75-mile pipeline section planned to go through northeast Las Animas County, Colorado is awaiting approval from the county planning commission and then the county board. As designed, the pipeline has a capacity of 150,000 barrels per day, which could be readily expanded to approximately 230,000 barrels per day and could begin service in the fourth quarter of 2013. Permit land agent Mike Rutherford said the company thought it only needed a special-use permit from the county for the project, which it had in hand before the state gave its final approval. It later turned out that it also needed a 1041 permit under county regulations. “We thought it was just going to be an SUP only and we already had that,” Rutherford said. “I guess if we’d known it was going to be a full-blown 1041, we could have gotten that four or five months ago, and been through this temporary approval process months ago.” The permitting process requires public notice of the application, followed by a 30-day period for comment from interested parties to the county board. Meanwhile, the application must work its way through the planning department approval process. Fourteen days after that, the planning commission and county board can approve the application at the same time, thus speeding up the process. Dixie Newnam, county attorney, said the entire process could take 45 – 60 days from the time the application was submitted.[91]

April 2, 2013: DCP Midstream Withdraws Plan to Build Megatank in Searsport

Abigal Curtis reported in the Bangor Daily News on April 2, 2013 that DCP Midstream is withdrawing thire application to build a controversial liquid propane gas terminal and storage tank project at Mack Point in Searsport. “We really, really wanted to do business in Maine,” said Roz Elliott, spokesperson for Denver-based DCP Midstream, citing the Searsport Planning Board’s initial meetings last week to review the $40 million project before issuing a final decision later this spring. “It’s unfortunate, but with these local circumstances, we don’t forsee doing future capital development in Maine.” The board members found that certain elements of the project did not meet the town’s ordinances. “Very extensive time, resources, passion — we really believed in this,” Elliott said, adding that the company decided to withdraw the application “as a courtesy” to the Searsport Planning Board.[92]

January 2, 2013: California Sues Phillips for Environmental Violations at Gas Stations

Bloomberg reported on January 2, 2013 that California Attorney General Kamala Harris and and seven county district attorneys filed a complaint on January 2, 2013 in state court seeking an order to force ConocoPhillips and Phillips 66 to comply with California’s laws for underground gasoline storage tanks as well as unspecified civil penalties for violating the state’s health and safety code. “The state’s hazardous waste laws help protect our residents from contaminated groundwater,” Harris said in a statement. “This lawsuit safeguards public health by ensuring proper maintenance of the tanks that store fuel beneath many California communities.” The People v. Phillips 66, RG13661894, Superior Court of California, Alameda County (Oakland) accuses the two companies of improperly monitoring, inspecting and maintaining underground storage tanks.[93]

November 12, 2012: Proposed Consent Decree Reached over Contamination at Cahokia Site

The Madison Record reported on November 12, 2012 that the federal government last week sued and reached a proposed settlement with thePhillips 66 Pipeline LLC in St. Clair County seeking to recover some of the money it spent on cleaning up the Rogers Cartage Site in Cahokia after the Environmental Protection Agency (EPA) issued an enforcement action memorandum in 2011 noting the presence of polychlorinated biphenyls (PCBs) at the site and directing Phillips 66 to excavate and remove about 16,575 tons of soil. Rogers Cartage Co. and its corporate parent, Tankstar Inc., were listed as potentially responsible parties to the contamination in a 2009 EPA liability notice. Phillips 66 received the notice as the current owner of the site. In 2011, Phillips 66 sued Rogers Cartage for cost recovery and injunctive relief. Phillips 66 will amend its complaint to pursue a claim for contribution if the proposed decree is approved.[94]

October 24, 2012: Louisiana Supreme Court Asked to Review Phillips 66 I-10 Bridge Case

KPLC reported on October 24, 2012 that the Louisiana Department of Transportation and Development (DOTD ) hopes the Louisiana Supreme Court will reverse the decision by Judge Clayton Davis to postpone the trial against Phillips 66 on a lawsuit for spilling an estimated 1.7 million pounds of ethylene dichloride (EDC). Judge Clayton Davis continued the lawsuit until a three-year environmental impact study is done. DOTD officials have said when a new bridge is built, they must avoid hitting the underground plume of chemical contamination to avoid spreading it and estimates the state's damages from the spill are $235-million, including the increased cost of a bridge with spans long enough to bypass the spill. "DOTD would like to move forward with the case and get a trial date," said DOTD Attorney Patrick McIntire. "Phillips 66 believes the trial court's [original] ruling was well-reasoned and fair," said a spokesman for Phillips 66.[95]

October 6, 2012: Roxana School District Receives $10 million More in Property Tax Revenue from Reassessment of the Wood River Refinery

The Telegraph reported on October 6, 2012 that for the 2012 fiscal year, the Roxana School District received $10 million more in property tax revenue from the reassessment of the Wood River Refinery, operated by Phillips 66, with about $9.5 million of the increase attributable to the district's operating funds. The district still is working toward securing a long-term agreement with the refinery, said Superintendent Deb Kreutztrager.[96]

On March 31, 2012 the St. Louis Post-Dispatch reported that at issue is the completion of a $3.8 billion expansion at the Wood River Refinery in 2011. Phillips 66 sought to blunt an expected increase in its assessed valuation — on which property taxes are based — by claiming that the vast majority of its operation is dedicated to pollution control. A pollution control facility designation means significantly smaller assessment increases, which mean that school districts and other taxing bodies get smaller increases in revenue. Plaintiffs in the lawsuit include the village of Roxana and the school districts in Roxana, Wood River and East Alton. They say they were not initially aware of the move because the Pollution Control Board and Illinois EPA did not provide proper information and public access to meetings, in violation of the Open Meetings Act and Freedom of Information Act. As a result, the suit claims, the local governments have not been able to formally dispute what they say is an obviously suspect claim: that $3 billion of the project's $3.8 billion expansion was dedicated to pollution control rather than the business of refining fuel.[97]

The refinery and a larger group of affected taxing bodies negotiated an agreement in 2005 that established tax valuation through 2010. That agreement set the value at about $265 million — an increase of about $85 million — and provided for annual increases at a rate 1 percentage point below any increase of the Consumer Price Index. The refinery also agreed to supplemental payments of more than $3 million for previous tax years. In March 2012, the Madison County Board of Review set the 2011 assessed value at $402.2 million, reflecting a market value of $1.2 billion. It would affect taxes payable this year. That is up sharply from the 2010 valuation of $93.4 million, based on a market value of $280 million.[98][99]

The huge expansion increased the refinery's oil-processing capacity by about a third, to 356,000 barrels per day, and enabled it to process heavy crude from the oil sands of Alberta, Canada. The oil arrives via the 2,100-mile-long Keystone Pipeline, which opened last year. Melissa Erker, a spokeswoman for the refinery, would not comment on litigation specifics but said the pollution control exceptions are part of the state's tax code and "allow us to remain competitive relative to property taxes as compared to other refineries in the Midwest."[100]

September 19, 2012: Phillips Sues Yellowstone County over Property Taxes on Billing Refinery

Equities.com reported on September 19 that Phillips 66 has taken its property tax protest involving its Billings refinery to court in Yellowstone County filing a complaint that the Montana Department of Revenue illegally or improperly raised the refinery's market value for 2010, resulting in a tax bill that was $623,715 higher. Phillips asked Yellowstone District Judge Ingrid Gustafson to block its revised tax assessment, saying it will "suffer irreparable injury absent the issuance of a preliminary injunction." The complaint also said Montana is improperly trying to retroactively raise the refinery's tax assessment from 2003 through 2010 in order to collect more taxes. The refinery's market value in 2010 should be $379,718,534, said Phillips, not the department's retroactive change to $508,333,155. Revenue Department officials in Helena says they conducted a routine audit in July and found that Phillips 66 refinery property that had “either escaped assessment, been erroneously assessed or omitted from taxation” from 2003 to 2010, said department spokeswoman Mary Ann Dunwell. Revenue Department officials in Helena said that they are reviewing the complaint and plan to file a response by the end of next week.[101]

September 7, 2012: Maine Fuel Board Approves Permit for DCP Midstream's Searsport Megatank

The Free Press reported on September 7, 2012 that the Maine Fuel Board has issued a permit to DCP Midstream to build a 22.7 million gallon propane storage tank in Searsport, the final permitting hurdle at the state and federal levels. The next step is for the company to submit the complete site application, including all state and federal permits, to the Searsport planning board for review.[102]

July 14, 2012: Phillips Protests Property Tax for Billings Refinery

The Missoulian reported on July 14 that Phillips is one of seven refinery, utility and communications companies in Yellowstone County that is protesting their property tax bill for the 2011 tax year. When a company protests its tax bill, the money is placed in an escrow account, earning interest, until the argument is settled. Schools and other taxing entities who were counting on the funds can tap into these “frozen” taxes, but must repay some or all of the money with interest if the taxpayer wins the protest.[103]

June 26, 2012: Court Hearing held on I-10 Bridge contamination from Chemical Spill that Caused $235 million Damage twenty years ago

KPIC.TV reported on June 272, 2012 that there's been almost no progress on a new I-10 calcasieu river bridge because state highway officials say they need to avoid hitting the underground plume of chemical contamination from a chemical spill nearly twenty years ago for which Conoco Phillips and Sasol are responsible and the State Department of Transportation and Development estimates the state's damages from the spill are $235 million including the increased cost of a bridge with spans long enough to bypass the spill. They don't want to drive pilings through the plume for fear of spreading the contamination. The state has filed suit to get that added cost and the jury trial is set for October. "There's contamination in the ground and the groundwater where we need to build the bridge. It's going to cost extra to stay out of the contamination when the bridge is built and that's the damages that the state is requesting that be awarded in the lawsuit. The state would like to stay out of the contamination and span the contamination and that's what drives up the extra cost," says Attorney Patrick McIntire representing the state of Lousiana.[104]

Conoco Phillips and Sasol say it's uncertain what kind of bridge should be built--and that the trial on that part of damages should be delayed until an environmental impact study which will take at least three years. "We are a valued member of this community, and are committed to being a part of the solution for this project in a manner that is consistent with the on-going federal environmental review process. The resolution of the motion presented today will not delay this project in any way," says Phillips 66 in an official statement.[105]

June 1, 2012: Plan for DCP Midstream's Giant Propane Gas Tank in Maine Generates Opposition

The Maine Public Broadcasting Company reported on June 1, 2012 that DCP Midstream's plan to build a 137-foot high, 23-million gallon liquid propane gas tank next to the Mack Point industrial area has generated heated opposition in communities along the midcoast as selectmen on the island community of Islesboro added their names to the list of people raising concerns about the tank. "Concerns about the project on the mainland have fallen into several categories," writes Jay Field. "There are those who say the tank is simply an eyesore that dwarfs all other industrial facilities in the area and threatens the sense of place on the midcoast. Others dread the large increase in truck traffic on Route 1 that will come if the project moves forward. Still others worry about the safety hazards of storing so much highly-flammable, liquid petroleum gas in one place." Even if it's approved, the project is all but certain to be challenged in court by opponents for years to come.[106]

May 29, 2012: Illinois’ Attorney General Sues Owners of Wood River Refinery for Ground Water Pollution

Saint Louis Today reported on May 29, 2012 that Illinois’ Attorney General Lisa Madigan is suing the current and past owners of the Wood River Refinery in Roxana, Illinois claiming they're responsible for polluted groundwater around the refinery. The suit comes just months after the Village of Roxana filed a similar lawsuit alleging contamination from the plant. The lawsuit claims the companies have allowed oil, gasoline and other toxins to permeate the groundwater and spread beyond the plant’s property line. "These companies must be held accountable for the environmental and public health damage caused by this contamination,” said the attorney general in a statement. The refinery is jointly owned by Cenovus Energy and Phillips 66, which operates the plant. Melissa Erker, a Phillips 66 spokeswoman, said the company has been working with Shell and state environmental regulators to allow access for remediation of historical contamination. "It is our belief that we are named because of our direct relationship with the former owner," Erker said.[107][108][109]

May 26, 2012: Oklahoma Property Owners Fight DCP's Gas Pipeline

The Daily Oklahoman reported on June 18, 2012 that DCP Midstream has filed lawsuits in district court that seek eminent domain judgments against 14 property owners in Oklahoma County as landowners have rejected DCP offers to pay for a portion of their land and say they will fight to keep the company off their land. “It’s not a matter of money for most of us, it’s a matter of principle,” says Joe Freund, a retired physician who lives on 40 acres of forestland about a mile east of Arcadia who is concerned that clearing a 75-foot wide strip of forest that runs the length of his property would tarnish the aesthetics that attracted him to this plot in the first place. “They claim that it’s for the public good and perhaps it is, but they won’t even move their pipeline one inch to avoid taking down trees a hundred years old.” DCP Midstream says the pipeline would tie gathering and processing systems across central and western Oklahoma to their existing line and is part of $2 billion in capital investments currently under development by DCP. “It’s about de-bottlenecking for the producers and finally giving them an opportunity to get their product to market," says Roz Elliott, vice president at DCP Midstream, adding that DCP hopes to run 250 million cubic feet of liquid natural gas to coastal markets every day by the middle of 2013.[110]

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  66. Santa Maria Sun. "Warning shots: A trio of recent lawsuits could signal a litigious future for Phillips 66 and its rail spur project" by Rhys Heyden. March 4, 2015.
  67. The San Jose Mercury News. "Rodeo: Phillips 66 project faces additional lawsuits" by Tom Lochner. March 6, 2015.
  68. Fort Bragg Advocate-News "Rodeo refinery project subject of legal challenge" by Tom Lochner. March 4, 2015.
  69. Martinez News-Gazette. "Teagan Clive: ‘Phillips 66’s New Tax Base’" January 22, 2015.
  70. New Times. "A crude proposal: The pros and cons of a controversial Phillips 66 oil-by-rail project" by Rhys Heyden. December 31, 2014.
  71. Alton Daily News. "Treasurer Distributes Settlement Funds" December 31, 2014.
  72. Santa Maria Sun. "Judge rules that Phillips 66 news media policy violates the law" by David Minsky. December 25, 2014.
  73. Billings. Gazette. "County adjusts Phillips 66’s tax bill after settlement" by Clair Johnson. December 2, 2014.
  74. Alton Daily News. "Settlement Agreement For Refinery" November 20, 2014.
  75. Billings Gazette. "Yellowstone County distributes protested taxes" by Clair Johnson. August 5, 2014.
  76. Cheminfo. "Canada-Billings Pipeline Access Granted" July 30, 2014.
  77. FuelFix. "Phillips 66 says court supports Sweeny takeover from PDVSA" May 28, 2014.
  78. New Times. "Organized opposition: Phillips 66 health and safety specialists allege they were punished for unionizing" by Colin Rigley. April 14, 2014.
  79. New Times. "Organized opposition: Phillips 66 health and safety specialists allege they were punished for unionizing" by Colin Rigley. April 14, 2014.
  80. New Times. "Organized opposition: Phillips 66 health and safety specialists allege they were punished for unionizing" by Colin Rigley. April 14, 2014.
  81. New Times. "Organized opposition: Phillips 66 health and safety specialists allege they were punished for unionizing" by Colin Rigley. April 14, 2014.
  82. CSP Daily News. "Phillips 66 to Pay $500,000 Over Clean Air Act Violations" March 26, 2014.
  83. Contra Costa Times. "Phillips 66 oil refinery in Rodeo to pay $230,900 for air pollution violations" by Denis Cuff. March 10, 2014.
  84. San Fransisco Chronicle. "Phillips 66 fined for air-quality violations at Rodeo refinery" by Victoria Colliver. March 10, 2014.
  85. Contra Costa Times. "Compliance hearing Monday for Phillips 66 Rodeo refinery" by Tom Lochner. February 28, 2014.
  86. Contra Costa Times. "Rodeo: Phillips 66 agrees to pay $6,000 in state fines for water pollution violations" by Tom Lochner. January 29, 2014.
  87. Insurance Journal. "Utah Claims Settled by Phillips 66 for $2 Million" by Paul Foy. January 14, 2014.
  88. Salt Lake City Tribune. "Accused of bilking cleanup fund, Phillips 66 pays Utah $2 million" by Brian Maffly. January 9, 2014.
  89. Salt Lake City Tribune. "Utah suing ConocoPhillips for fraud over cleanup funds" by Judy Fahys. July 11, 2012.
  90. Billings Gazette. "CHS, Phillips 66 refineries continue tax protests" by Clair Johnson. May 31, 2013.
  91. The Trinidad Times. "Pipeline permit delays project; Company would like to start June 1" by Steve Block. April 19, 2013.
  92. Bangor Daily News. "Developer withdraws proposed Searsport tank application" by Abigail Curtis. April 2, 2013.
  93. Bloomberg. "Phillips 66 and ConocoPhillips Sued by California Over Tanks" by Edvard Pettersson. January 2, 2013.
  94. Madison Record. "Proposed consent decree reached over contamination at Cahokia site" by Bethany Krajelis. November 12, 2012.
  95. KPLC. "La. Supreme Court asked to review I-10 Bridge case" by Theresa Schmidt. October 24, 2012.
  96. The Telegraph. "Contract talks snarled in Roxana district" by Kathie Bassett. October 6, 2012.
  97. The St. Louis Post-Dispatch. "Tax break frozen as judge hears dispute on assessment of Wood River Refinery" by Kevin McDermott. March 31, 2012.
  98. The St. Louis Post-Dispatch. "Tax break frozen as judge hears dispute on assessment of Wood River Refinery" by Kevin McDermott. March 31, 2012.
  99. The Telegraph. "Roxana teachers send message" by Kathie Bassett. October 11, 2012.
  100. The St. Louis Post-Dispatch. "Tax break frozen as judge hears dispute on assessment of Wood River Refinery" by Kevin McDermott. March 31, 2012.
  101. Equities.com "Phillips 66 Billings refinery sues over property taxes" September 19, 2012.
  102. The Free Press. "Maine Fuel Board Approves Permit for Searsport Megatank" by Christine Parrish. September 7, 2012.
  103. The Missoulian. "Corporate tax protests a concern in Yellowstone County" July 14, 2012.
  104. KIPT TV. "Court hearing held on I-10 Bridge contamination" by Theresa Schmidt. June 26, 2012.
  105. KIPT TV. "Court hearing held on I-10 Bridge contamination" by Theresa Schmidt. June 26, 2012.
  106. Maine Public Broadcasting Company. "Plan for Giant Propane Gas Tank in Searsport Generates Opposition" by Jay Field. June 1, 2012.
  107. St. Louis Today. "Illinois AG sues refinery over groundwater pollution" by Jeffrey Tomich. May 29, 2012.
  108. Reuters. "Illinois sues Wood River, alleging water pollution" May 29, 2012.
  109. Illinois Attorney General. "MADIGAN FILES LAWSUIT ALLEGING POLLUTED GROUNDWATER AT WOOD RIVER REFINERY IN ROXANA" May 29, 2012.
  110. NewOK.com "Oklahoma County property owners fight against gas pipeline" by Zeke Campfield. May 26, 2012.



Master Index of Articles about Phillips 66

The North Tower and the South Tower, part of Phillips 66's Refinery Complex in Ponca City, contain over 250,000 square feet of Class A office space that is essentially unused. Research West contains another 230,000 square feet of unused Class A office space. Photo: Hugh Pickens
Ponca: A Core Asset. Phillips CEO Greg Garland told members of the Bartlesville Chamber of Commerce on August 27, 2013 that the refinery at Ponca is a 'core asset' of Phillips 66. The refinery in Ponca City "is making very good money for us," Garland told his Bartlesville audience. Garland added that he expects gas demands in the U.S. to decline by 20 percent in the next 10 years, but that demand for refined products in South America and Africa will more than offset that decline.

by Hugh Pickens, Ponca City Oklahoma


The purpose of this report is to provide a comprehensive overview of Phillips 66 that documents and explains the company's business strategy and execution of that strategy.

Major Sections of this report on Phillips 66 include:

Safety, Environment, Legal


Corporate


Strategic and Financial


Business Segments


Stock Market


Reference

Refining Business Segment


Increasing Profitability in Refining Business Segment


Detailed Look at Ponca City Refinery


Other Phillips Refineries


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